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Contracts II
University of Mississippi School of Law
Bradley, John R.

My Contracts Outline

I. Parol Evidence Rule
– Parol Evidence Rule = If there is a binding agreement that is either completely or partially integrated, evidence of prior agreements or negotiations is NOT admissible to contradict a term of the writing
– integration: process of expressing the parties’ intent in a way that does NOT allow either party to contradict expression
– 2 types of integration:
o complete: cannot be contradicted OR supplemented
o partial: cannot be contradicted, but may be supplemented by evidence of consistent additional terms
– integrated agreement: writing constituting final expression of parties intent as to one or more terms
– When P/E/R applies it acts to exclude evidence by rendering it inadmissible in court

a. Williston View – If the 2nd agreement is complete in form, or appears to be complete on its face it is sufficient to show the intent of the parties
i. Under this view, the writing is sanctified and wipes out any prior agreements
b. Corbin View – In order to find the parties’ intent in adopting the writing, look at the normal indicators of intent
i. The effect of adopting a writing depends on the intent of the parties in adopting it
ii. In order to determine intent, it is necessary to examine the surrounding circumstances
c. Trend is toward court’s applying the Corbin View
§ 209 – Integrated Agreements
– An integrated agreement is a writing constituting a final expression of one or more terms of an agreement
– 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 p/e/r
– 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 of agreement
§ 210 – Completely and Partially Integrated Agreements
– A completely integrated agreement is an integrated agreement adopted by the parties as a complete and exclusive statement of the terms of the agreement
– A partially integrated agreement is an integrated agreement other than a completely integrated agreement
– Whether an agreement is completely or partially integrated is to be determined by the court as a question preliminary to determination or application of the p/e/r
§ 215 – Contradiction of Integrated Terms
– Where there is a binding agreement, either completely or partially integrated, evidence of prior or contemporaneous agreements or negotiations is not admissible in evidence to contradict a term of the writing
d. 5 questions to ask to determine if P/E rule. applies:
1. Is #2 (2nd agreement) a binding agreement?
o If NO, P/E rule does NOT apply
o Evidence is admissible to show that an agreement is NOT binding b/c of lack of consideration, fraud, mistake, unconscionability, etc. (§
2. Is #2 an integrated agreement?
o If NO, P/E rule does NOT apply
3. Is #2 a COMPLETELY integrated agreement?
o § 210- an agreement that is intended by both parties to be a complete and exclusive statement of the terms of the agreement
4. Is #1 inconsistent w/ #2?
o if NO (1 and 2 are consistent), then P/E rule does NOT apply
5. Is #1 w/in the scope of #2?
o if NO, then P/E rule does NOT apply

General rule: parol evidence is ALWAYS admissible to show that agreement is voidable
e. P/E/R Exceptions (P/E/R does not apply to show):
i. The writing was never intended to be operative
ii. The writing was to be effective ONLY upon the occurrence of an event
iii. The writing is/is not an integrated agreement
iv. The integrated agreement is completely/partially integrated
v. The meaning of the writing (whether it is integrated or not)
vi. Illegality, fraud, duress, mistake, lack of consideration, or other invalidating cause
vii. Ground for granting/denying rescission, reformation, specific performance, etc.
f. P/E/R does not apply to agreements made after the signing of the K (#2). Evidence of K modification is admissible
g. P/E/R does not apply to (prior) K’s supported by separate consideration
i. Generally, evidence is allowed to demonstrate that #1 was a separate agreement
h. CISG/international sale of goods is not governed by the P/E/R
i. A court interpreting a K of this type is allowed to consider all relevant evidence, and may even consider prior negotiations
§ 216 – consistent additional term
– Evidence of a consistent additional term is admissible to supplement an integrated agreement unless the court finds that the agreement was completely integrated
– An agreement is not completely integrated if the writing omits a consistent additional agreed term which is
o Agreed to for separate consideration or
o Such a term as in the circumstances might naturally be omitted from the writin

i. merger clauses can be held to be unconscionable if “sprung” on the other party
iii. if a merger clause is “boilerplate” then many cts will find that both parties did NOT intend to be bound by clause
iv. merger clauses are NOT completely controlling, but do create a presumption that the written agreement was intended to be a complete integration
v. Remember Dannan Realty Case – the merger clause was very specific – ct. did not let buyer introduce evidence that was specifically disclaimed by the merger clause

l. No Oral Modification Clause (NOM) = a clause in the K whereby the parties agree that they will only make written modifications to the K
i. General rule at c/l was that oral modification was enforceable regardless of a NOM clause b/c the parties should surely be allowed to change their minds about something they decided earlier
ii. Other cts. asked who made the modification to determine whether it was enforceable
1. If the modification was made by someone w/o authority to make/modify the K, then the modification was not enforceable
§ 2-209(2) – a signed agreement which excludes modification or rescission except by a signed writing cannot be otherwise modified or rescinded, except as b/t merchants where the requirement on a form is supplied by the merchant it must be separately signed by the other party
§ 2-209(4-5)
– Although an attempt at modification (or rescission) does not satisfy the requirements of subsection (2), it can operate as a waiver
– A party who has made a waiver affecting an executor portion of the K may retract the waiver by r’ble notification received by the other party that strict performance will be required of any term waived, unless the retraction would be unjust in view of a material change in position in reliance on the waiver
m. UCC 2-209 changes the C/L in 2 ways:
i. modification of K for sale of good needs NO consideration to be binding
ii. If a K has a NOM, modifications must be written