1. Interpretation
The existence of writing may be considered privileged in some manner and given priority over oral communications when interpreting the meaning of assent. This is governed by the Parol Evidence Rule.
A. Interpreting a Writing— The Parol Evidence Rule
Thompson v. Libbey (Williston approach)
1. Parol contemporaneous evidence is inadmissible to contradict or vary the terms of a valid written instrument.
However, the contract must be fully integrated
Oral testimony cannot be used to purport that the writing was not fully integrated
2. If the writing on its face to be a complete expression of the whole agreement (if it contains such language as to create a legal obligation) it is to be presumed that the parties introduced into it every material term.
Brown v. Oliver (Wigmore approach)
1. Parol evidence is admissible if the writing is deemed not to have been an integrated agreement
2. Parol Evidence that has to do with the question of the intent of the parties to integrate their transaction into a writing may be admitted when the writing itself doesn’t establish the intent.
Restatement 209- Integrated agreements-
1. An integrated agreement is a writing 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 before they determine the interpretation or parol evidence rule.
3. Where parties reduce an agreement to a writing which 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 was not a final expression.
a. Significance of integration. Where the parties to an agreement have reduced a term of the agreement to specific words or other symbols, interpretation of that term relates to the meaning of the words and symbols used. See § 212. An integrated agreement supersedes contrary prior statements, and a completely integrated agreement supersedes even consistent additional terms. See §§ 213-16. But both integrated and unintegrated agreements are to be read in the light of the circumstances and may be explained or supplemented by operative usages of trade, by the course of dealing between the parties, and by the course of performance of the agreement.
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. The intention of the parties may also be manifested without explicit statement and without signature. A letter, telegram or other informal document written by one party may be orally assented to by the other as a final expression of some or all of the terms of their agreement. Indeed, the parties to an oral agreement may choose their words with such explicit precision and completeness that the same legal consequences follow as where there is a completely integrated agreement.
Illustrations:
1. A and B enter into an oral contract, and prepare and sign a writing to incorporate its terms. Though the writing contains substantially all the orally agreed terms, they are not fully satisfied with it, and they agree to have it redrafted. There is no integrated agreement.
2. A orally agrees to employ B on certain terms. B immediately writes and A receives a letter beginning, “Confirming our oral arrangement this morning,” and fully stating the contract as he understands it. A makes no reply but with knowledge of B’s understanding accepts services from B under the contract. The letter is a completely integrated agreement. Even though the letter is not in all respects accurate, it operates as an offer of substituted terms, and A’s acquiescence manifests assent to those terms.
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
it the use of facilities in an adjacent building and to provide heat. The parties subsequently execute a written lease agreement which makes no mention of facilities or heat. The question whether the written lease was adopted as a completely integrated agreement is to be decided on the basis of all relevant evidence of the prior and contemporaneous conduct and language of the parties.
c. Partial integration. It is often clear from the face of a writing that it is incomplete and cannot be more than a partially integrated agreement. Incompleteness may also be shown by other writings, which may or may not become part of a completely or partially integrated agreement. Or it may be shown by any relevant evidence, oral or written, that an apparently complete writing never became fully effective, or that it was modified after initial adoption.
Illustration:
2. A writes to B a letter offer containing four provisions. B replies by letter that three of the provisions are satisfactory, but makes a counter proposal as to the fourth. After further discussion of the fourth provision, the parties come to oral agreement on a revision of it, but make no further statements as to the other three terms. A’s letter is a partially integrated agreement with respect to the first three provisions.
Restatement 213- Effect of integrated agreement on prior agreements (Parol Evidence Rule)
A binding integrated agreement discharges prior agreements to the extent that it is inconsistent with them.
A binding completely integrated agreement discharges prior agreements to the extent they are within its scope.
An integrated agreement that isn’t binding or that is voidable and avoided does not discharge a prior agreement. But an integrated agreement, even though not binding , may be effective to render inoperative a term which would have been a part of the agreement if it had not been integrated.
