Parol Evidence Rule – “In the event of litigation, one party may seek to introduce evidence of the negotiations in the writing. Here that party will be et with the parol evidence rule, which, where the parties have embodied their agreement in writing, may preclude reliance on such extrinsic evidence as negotiation”
Objective of Parol Evidence Rule: to protect the written document
Will only have a Parol Evidence issue wherever there’s a writing, when oral contract parol, evidence does not apply
Negotiation can be oral or written (emails, post-its)
Integration: process of taking everything for negotiation and putting it into a final document
Restatement Section 209, 210
Legal Consequence of complete integration: No additional evidence permitted, parol evidence not admissible; discharges prior agreements to the extent that they are within its scope
Legal Consequence of partial integration: Only consistent terms are allowed (Restatement S 216(1)), and parol evidence not admissible on the part that is integrated, discharges prior agreements to the extent that it is inconsistent with them
Gianni v. Russell & Co.—Gianni and Russel negotiated 3 yr. Lease w/no tobacco provision, Gianni claims that for increased rent & no tobacco, he and D had agreement that he had exclusive rights to sell drinks (not in written agreement)
*Illustrates consequence of complete integration*
RULE: If parol evidence is to be excluded, the writing must be the entire contract between the parties. Oral agreements come within the field of the written one if the parties “would normally include it” and if “they relate to the subj. matter and are so interrelated that both would be executed at the same time and in same contract”
THIS CASE, k would have naturally cobered exclusive rights to sell soft drinks.
RULE: If a contract covers or deals with an element, it represents all of the transaction of that element.
Did parties accept writing as final expression of 1 or more terms of an agreement? (If yes, integrated agreement).
If integrated agreement, is writing complete & exclusive statement of terms? If yes—completely integrated; If no—partially integrated agreement
Masterson v. Sine—Masterson and wife conveys to Sine’s with option to purchase before Feb 1968 for same consideration plus depreciation value of any improvements Grantees may add to prop. From and after 2.5 yrs. From the date—Matsterson filed for bankruptcy, brought this action to establish their right to enforce
This situation is naturally one that may have been made as a separate agreem
to trade and there was no proof that D had actual knowledge of usage (they were in business for less than a year). Also, trade usage so that knowledge can be assumed, has to be long, continuous and notorious.
Trade usage not going to stick here – need to have notorious use or actual knowledge.
RULE: A parties subjective interpretation or subjective understanding of a contract term must be supported by reasonable and objective standards (for ex: dictionary, trade usage, FDA regulations)
W.W.W. Associates, Inc. v. Giancontieri—contract for purchase of property, 2 acres D’s to sell for P; reciprocal cancellation provision: parties acknowledge that sellers been served w/property in action concerning the property, if closing of title is delayed by litigation and not concluded before 6/1/07, either party shall have right to cancel—didn’t close by date and D’s cancel—possible parol evidence that D’s may have been waiting to cancel k and get higher price
*ILLUSTRATES 4 CORNERS RULE*
No ambiguity here, not going to create one
