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Contracts II
South Texas College of Law Houston
Powers, Jean Fleming

Contracts II
Powers – Fall 2000
I.                 Perol Evidence Rule (PER)
A.              The PER keeps out prior and contemporaneous agreements. Written or oral negotiations prior to the K are not admitted because everything should have been included in the writing.
B.              PER determines the admissibility of evidence, not the truth or falsity of it.
C.              Applies to anything that happen before final writing was entered into, but not after writing was entered into
D.              3 requirements for Parol Evidence Rule (PER):
1.               Collateral – supplementary
2.               Cannot contradict writing
3.               Completeness – is the writing complete?
E.              Integration
1.               Total Integration: the parties intend to include all details of their agreement in the writing. No evidence of prior or contemporaneous agreements or negotiations may be admitted if it either contradicts or adds to the writing.
2.               Partial Integration: the parties did not intent to include all of the details. No evidence of prior or contemporaneous agreements or negotiations may be admitted if it contradicts the writing; however, it may be allowed if it adds to the writing (i.e. explains or supplements). They must be consistent additional terms.
3.               Traditional courts look to the writing only to determine if it is complete on its face.
4.               Modern courts look to the writing and the PE (circumstances surrounding the writing).
5.               If a writing is silent in a term – it is not complete integration.
F.               PER Test
1.               Is it written K?
2.               Does it contradict the writing?
3.               Is the agreement complete/integrated?
a)              Trad: Objective – What would the parties naturally do? Ex: Mitchell v. Lath: reasonable men would have put the agreement to remove the icehouse in the writing.
b)              Mod: Subjective – What did the parties intend? Looks at the extrinsic evidence to

ms v. Johnson: P is doing home improvement work for the D that is conditioned on D obtaining financing. Condition was oral and not included in the K. Evidence of their agreement was allowed under the completeness test. K was not intended to have meaning unless D got financing.
I.                  Warranties and Disclaimers
1.               If you have a warranty and a disclaimer that contradicts – the warranty stands.
2.               If you have a warranty and an oral disclaimer – the PER does not allow the disclaimer.
3.               If you have a written disclaimer and an oral warranty – the PER would not allow the warranty.
4.               Implied warranty will prevail unless specifically disclaimed and mentioned merchantability
5.               Merger Clause – both parties state intent for K to be final