Terms

     Contracts consist of terms.  Review Commentary.Introductory vocabulary and concepts.  Promises made by one or both of the parties are the most obvious type of term, describing the performance obligations of each party and the time at which the performance is to occur.  You have already learned something about promises in your study of the topic of consideration.  Conditions to performance are another fundamental type of term, describing events that either trigger or excuse a party's obligation to perform.  We will learn more about both promises and conditions shortly.  See Commentary.Promises and conditions.  Before doing so, however, there are some important preliminary topics to consider. 

     First we consider the source of terms.  Obviously, when an agreement is expressed orally or in writing, the words used by the parties in either their written or oral expression are the source of some of the contract terms.  We call these express terms.  Sometimes, however, the parties express their agreement in writing and thereafter one party claims that the parties agreed, either at an earlier time or contemporaneously with execution of the writing, to other express terms that either add to or contradict the writing.  Can those other alleged terms become part of the contract?  The parol evidence rule responds to this question.  See Commentary.Parol evidence. 

     Often, the written or oral expression of the parties does not address issues that arise under the contract, even such basic issues as a price to be paid, a time for performance, or the remedy for breach.   Contract law permits a court to supply some  missing terms, either by implication from the facts and circumstances attending formation of the contract (implied-in-fact terms) or by default rules (default terms).  We first encountered implied-in-fact terms in Wood v. Lucy, Lady Duff-Gordon (an implied-in-fact term -- to use best efforts to market products - - supplied consideration for a promise of an exclusive right to market designs) and we see another example in Pugh v. See's Candies (in which an employee claims that he was not treated sweetly by his employer).  As one example of default terms, we will study warranties of quality and fitness relating to goods that are supplied  by provisions of Article 2 of the Uniform Commercial Code.  See Problem.Dispute.Laptop computer, Commentary.Default terms, and Bailey v. Tucker Equipment Sales, Inc.  

     In some cases, however, a court may conclude that an expression of agreement between parties is insufficient to form a contract, notwithstanding resort to implied-in-fact terms or default terms, because the agreement still fails to supply a reasonably sufficient basis for giving an appropriate remedy.   R.2d Contracts 33.  Academy Chicago Publishers v. Cheever, involving a dispute between an author's widow and a publishing company, is one such case.  Lafayette Place Associates v. Boston Redevelopment Authority reaches the opposite conclusion in the context of a complex agreement for redevelopment of land in the City of Boston. 

     The meaning of express terms may also be the subject of dispute.  Accordingly, we also must attend to tools of interpretation supplied by contract law to resolve such disputes.  See Commentary.Interpretation.   It is useful to learn about these tools from two perspectives, the perspective of the litigator or judge and the perspective of the contract drafter.  Thus, you will look at how courts ascertain meaning when the parties have not been able to resolve a disagreement about meaning, and, by practicing some contract drafting, you will experience the possibilities and difficulties of expressing meaning as clearly and concisely as possible in an effort to avoid future disagreement.  As a prelude to some contract drafting exercises, please read Commentary.Anatomy of a written agreement.