CONTRACT 2 OUTLINE
I. Parol Evidence and Interpretation
A. PER (Common law)
1. IF an agreement is PARTIALLY INTEGRATED (ie., a writing that constitutes a final expression of one or more terms of agrement), evidence of PRIOR or CONTEMPORANEOUS
agreements is NOT ADMISSIBLE TO CONTRADICT, 215, but evidence of a consistent add’l term MAY SUPPLEMENT the agreement, 216.
2. IF a writing is COMPLETE INTEGRATION (ie., adopted by the parties as a complete and exclusive statement of the terms of the agreement, 210) evidence of PRIOR or CONTEMPORANEOUS terms MAY NOT BE ADMITTED for any reason(to contradict, 215, or supplement, 216(1)).
-partially integrated–you agree on at least one term..anything other than a complete one.
-completely integrated-complete and exclusive statement of the terms of the agreement.
-parties will usually argue whether it is partial or complete or whether it contradicts or supplements.
-per only prohibits entering prior or contemporaneous
B. Common law PER questions to ask:
1. Is the term prior (writen or oral) or contemporaneous (oral); if so, potential PER problem. (Ie., potentially inadmissible per PER.) See Rest 213. If not, PER doesn’t apply.
2. If so, is it an integration (intended to be final-agreement on 1 term)?
-rest 214(a)-we will always allow the judge to look at external (extrinsic) evidence to show whether integrated.
3. If so, is it complete? TEST:
A. Traditional: to decide this is complete, the court looks at the document itself. “4 corners rule”: where the writing on its face appears to be the complete discussion of the rights and obligation of both parties, it is a complete integration UNLESS the add’l terms were such that the parties would naturally enter into a separate agreement regarding the add’l terms.
-it is complete unless there is a hole or facial ambiguity in it.
B. Modern: Look at the Intention of the parties in light of the writing and surrounding circumstances (rest 214(b)). Can’t get this just by using the 4 corners rule. Consider:
-the writing- look at the document to see if u can find a merger clause (integration clause), other language
-Course of dealings, Usage of trade, Course of performance
-look at the nature of the transaction–is it easy to insert terms in?
-Parties-who are parties, formal or informal relationship, etc.
IF COMPLETE, term excluded. If not: then its partial and CAN be admitted only to supplement but not to contradict.
4. Does the term contradict the writing?
-If yes, PER prohibits (excludes).
-If no, PER allows admission
5. Do any exceptions apply?
a.Sham or fraud-u can bring in evidence that they never intended to have a deal at all. (ex: Val-Ford pg 345)
b.Mistake-sometimes both parties intend for a term to be included and for some clerical error, etc the term was left out. Both parties cl
-a merger clause is not a “nom” clause. You must have a separate clause stating it may not be modified. Be careful with this on exam.
E. NOM Clause:
1. IF: there is a signed agreement and it excludes modification except in writing,
2. THEN: it cannot be otherwise modified (ie. Orally)
a. –argue not modification (interpret K)-eg 2-208 (where K is an installment K, but parties act differently for months, what better indicator of what parties meant but how they acted under that agreement).—argue its not modification, its cp b/c that’s how they acted all along (argue this if someone wants to get something oral in after the K). cp,cd, ut.
b. –argue K not between merchants, and merchant’s form not separately signed by other (argue this when trying to get a term in that’s not in the agreement).
c. –argue waiver (2-209(4))..Reliance necessary (maj. Cases say if u wanna argue waiver must find not only intentional relinquishment of a right, but also reliance-some change of behavior b/c of modification).
i. Waiver- an intentional relinquishment of a known right.