Contracts II Outline
I. WHAT ARE THE TERMS OF THE DEAL? WHAT DID THE PARTIES AGREE TO DO?
A. Express Terms and Parol Evidence
Parol Evidence rule (PAR): governs the effect of a written agreement on any prior oral or written agreements between the parties. A writing intended by the parties to be a full and final expression of their agreement may not be supplemented or contradicted by any oral or written agreements made prior to the writing.
\ Cannot supplement or contradict the terms of the deal
®It does not bar admission of evidence of oral agreements made after the writing
®Does not bar evidence about the meaning that parties intended to give to the K.
§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.
(3) An integrated agreement that is not 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 part of the agreement if it had not been integrated.
How it comes about: anything that the parties discussed or put in writing before entering into a written document. Start with a written document, so it is anything in negotiations leading up to that document, ie. Drafts, emails, etc. Essentially, when the parties have a final expression of the deal and it is a final expression of the deal, then all other agreements and negotiations are void b/c they are superceded by the final agreement.
® It is justified as a matter of policy based on evidentiary concerns.
®It is a substantive rule of law b/c it is not about what can come into evidence, but rather any prior communications are void.
Integration: occurs when the parties intend a document to represent the final expression of their agreement.
1. Partial Integration- when the parties do not intend to include all the details of the prior negotiations.
2. Total Integration- when the parties intend to include all the details of their agreement.
§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 reasonabl
f. So the merger clause in the Elway case, shows it is an integrated agreement and the extrinsic evidence is not allowed.
®Reasonable person standard: Would a reasonable person in the position of the contracting parties would have naturally put the terms of the alleged oral agreement into the final writing, or would instead have left them out.
Modern approach: look to the interpretation. A standard v. rule. The standard looks at the situation and the circumstances and what is happening between the parties based on conduct, discussion, past dealings and things that go beyond the four corners or the document.
®Subsequent oral modifications are not barred by the PAR.
UCC: § 2-202
(1) Terms with respect to which the confirmatory records of the parties agree or which are otherwise set forth in a record intended by the parties as a final expression of their agreement with respect to such terms as are included therein may not be contradicted by evidence of any prior agreement or of a contemporaneous oral agreement but may be supplemented by evidence of:
