Class 1 Notes

This Semester:
1. Whata id the parties promise to do in their contracts?
2. When is a party excused from doing what he or she promised?
3.

Parole Evidence Rule:

"Few things are Darker than this or fuller of subtle difficulties"

1. PER only comes into play when there is a written agreement
2. If written - Deemed Final - Becomes Integrated
3. If not in writing, Party should not be able to execute

RST-213: 

(1) A binding integrated agreement discharges prior agreements to the extent that it is inconsistent with them.

(2) A binding completely integrated agreement discharges prior agreements to the extent that they are within its scope.

RST 209(1):

§209. INTEGRATED AGREEMENTS

(1) An integrated agreement is a writing or writings constituting a final expression of one or more terms of an agreement.

(2) Whether there is an integrated agreement is to be determined by the court as a question preliminary to determination of a question of interpretation or to application of the parol evidence rule.

(3) Where the parties reduce an agreement to a writing which in view of its completeness and specificity reasonably appears to be a complete agreement, it is taken to be an integrated agreement unless it is established by other evidence that the writing did not constitute a final expression.

Comments:

b. Form of integrated agreement. No particular form is required for an integrated agreement. Written contracts, signed by both parties, may include an explicit declaration that there are no other agreements between the parties, but such a declaration may not be conclusive....

c. Proof of integration. Whether a writing has been adopted as an integrated agreement is a question of fact to be determined in accordance with all relevant evidence. The issue is distinct from the issues whether an agreement was made and whether the document is genuine, and also from the issue whether it was intended as a complete and exclusive statement of the agreement. See §210; compare Uniform Commercial Code §2-202. Ordinarily the issue whether there is an integrated agreement is determined by the trial judge in the first instance as a question preliminary to an interpretative ruling or to the application of the parol evidence rule. See §212, 213. After the preliminary determination, such questions as whether the agreement was in fact made may remain to be decided by the trier of fact.

Nelson V. Elway

merger clauses bar extrinsic evidence integration clauses preclude the introduction of extrinsic evidence to prove the existence of prior agreements.                               integration clause - In contract law, an integration clause, or merger clause (sometimes, particularly in the United Kingdom, referred to as an entire agreement clause) is a term in the language of the contract that declares it to be the complete and final agreement between the parties. It is often placed at or towards the end of the contract.

In the United States, the existence of such a term is normally not conclusive proof that no varied or additional conditions exist with respect to the performance of the contract beyond those that are in the writing but instead is simply evidence of that fact.

A contract that has such a clause may be deemed an integrated contract, and any previous negotiations in which the parties to the contract had considered different terms will be deemed superseded by the final writing. However, many modern cases have found merger clauses to be only a rebuttable presumption.

Issue is whether buy- sell agreements Merger Clause, super-cedes the service agreement then the court will rule in favor of Elway

Holding: The merger clause preclude consideration of extrinsic evidence to ascertain the intent of the parties; FOR D

The merger clauses completely manifest the intention of the parties that only those terms of the transaction reduced to writing and signed at the closing would be enforceable terms of the agreement.  It would be improper for the court to look outside the contract to determine the intent of the parties. The parties agreed to the terms of the Buy-Sell agreement and all other agreements, oral or written, are void.

(The 4 corners Approach - Traditional Approach - The term is ordinarily included in the phrase within the four corners of the document, which denotes that in ascertaining the legal significance and consequences of the document, the parties and the court can only examine its language and all matters encompassed within it. Extraneous information concerning the document that does not appear in it—within its four corners—cannot be evaluated.)

MODERN TREND - DISSENT:  The trial and appeals ct. erred by allowing summary judgment.  D’s case is adequately supported in the record and the merger agreement is a disputed issue of material fact.  Parties disagree regarding their intent to honor the alleged service agreement, and the dispute requires a factual determination.  Rule:courts should consider not only the language of the agreement but all extrinsic evidence relevant to the issue of whether the parties intended the written agreement to be a complete integration.

§210. COMPLETELY AND PARTIALLY INTEGRATED AGREEMENTS

(1) A completely integrated agreement is an integrated agreement adopted by the parties as a complete and exclusive statement of the terms of the agreement.

(2) A partially integrated agreement is an integrated agreement other than a completely integrated agreement.

(3) Whether an agreement is completely or partially integrated is to be determined by the court as a question preliminary to determination of a question of interpretation or to application of the parol evidence rule.

Comment:

a. Complete integration. The definition in Subsection (1) is to be read with the definition of integrated agreement in s 209, to reject the assumption sometimes made that because a writing has been worked out which is final on some matters, it is to be taken as including all the matters agreed upon. Even though there is an integrated agreement, consistent additional terms not reduced to writing may be shown, unless the court finds that the writing was assented to by both parties as a complete and exclusive statement of all the terms....

b. Proof of complete integration. That a writing was...adopted as a completely integrated agreement may be proved by any relevant evidence. A document in the form of a written contract, signed by both parties and apparently complete on its face, may be decisive of the issue in the absence of credible contrary evidence. But a writing cannot of itself prove its own completeness, and wide latitude must be allowed for inquiry into circumstances bearing on the intention of the parti

--------------------------------------------------------------------------------------------------------------

Rogers V. Jackson

Condition: is an event not certain to occur, which must occur before and obligation or duty arises.

Integrated agreement: Final and written expression of the agreement.

Exclusive - complete integration

Non Exclusive - Partial Integration

As a general rule parol evidence of additional terms is admissible to supplement a partially integrated written agreement if the additional terms are consistent with the writing.

No need for merger clause, in order to have integrated agreement.
Presumption in court is always integration.

Never lose sight of: What is the Parol Evidence?

Issue: Must prove whether the partial integration contradicts, does the parol evidence rule contradict the IOU
Whether the oral condition contracdicts what parties committed to paper.

Majority:

Dissent: There is a contradiction here. Therefore the court cannot consider it, it is super-ceded by the writing.
The IOU is unambiguous. Ambiguity is an exception in the PER.