CONTRACTS OUTLINE—Spring 2007 (Wellman)
1. Parol Evidence: limits the extent to which a party may establish that discussions or writing prior tot the signed written contract should be taken part of the contract
a. in some circumstances—bars consideration of any evidence of certain preliminary agreements (which are not in the final writing)—even if that agreement did take place and the parties did intend for it to be part of the final agreement
b. purposes of the parol evidence rule:
i. to aid in the interpretation of existing terms
ii. to show that a writing is or is not integrated
iii. to establish that an adequate integration is complete or partial
iv. to establish subsequent agreements or modifications between the parties
v. to show that terms were the product of illegality, fraud, duress, mistake, lack of consideration or other invalidating cause
c. Total and partial integrations
i. “integration”: if it is intended as the final expression of the agreement (NOTE: Parol evidence rule only applies to documents which are integrations)
1. Restatement (second) §209
a. An integrated agreement is a writing or writings constituting a final expression of one or more terms of the agreement
b. Whether there is an integrated agreement is to be determined be the court as a question preliminary to determination of a question of interpretation or to application of the parol evidence rule
c. Where the parties reduced 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 sit is established by other evidence that the writing did not constitute a final expression
2. Restatement (second) §210
a. A completely integrated agreement is an integrated agreement adopted by the parties as a complete and exclusive statement of the terms of the agreement
b. A partially integrated agreement is an integrated agreement other than a completely integrated agreement
c. Whether an agreement is completely or partially integrated is to be determined by the court as a preliminary question to determination of a question of interpretation or to application of the parol evidence rule
ii. Partial integration: document intended to be final, but is not intended to include all details of the agreement
1. no evidence of prior or contemporaneous agreements (oral or written) if they contradict a term of the writing
iii. Total integration: is not only a final expression, but includes all the details of the agreement
1. no evidence of prior or contemporaneous agreements (oral or written) if they contradict or add to the writing
iv. applies to oral or written agreements or discussions prior to the signing of an integration
v. if an ancillary writing is signed at the same time as the integrated writing, it will be treated as part of the writing and is not subject to the parol evidence rule
vi. never bars consideration of subsequent oral agreemen
valid contract exists
1. particular disclaimers: if a contract contains a very specific statement that says no representations of a particular sort have been made—some courts prevent from showing that disclaimer is false
ii. existence of a condition—if the parties orally agree on a condition, but this condition is not included in the writing, courts will generally allow proof of this condition despite the parol evidence rule
iii. collateral agreements—an oral agreement that is supported by separate consideration may be demonstrated, even if it occurred prior to the integrated writing
iv. subsequent transactions—never bars evidence from after the signing of a writing (must still independently satisfy the requirements for a valid contract—ie: separate consideration)
v. “naturally omitted” terms—parol evidence is admissible if it concerns a term that would naturally be omitted from a written agreement (Restatement (second) §216)
1. treated as naturally omitted if:
a. does not conflict; and
b. concerns a subject that similarly situated parties would not ordinarily be expected to include
two approaches—same as with determining whether a writing is integrated—Williston v. Corbin
