LAW 506-002 – Contracts II
Parol Evidence Rule
Is it integrated?
Final Written Expression: Parol or Extrinsic Evidence.
Terms with respect to which the confirmatory memoranda of the parties agree or which are otherwise set forth in a writing 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 explained or supplemented
- An integrated agreement is a writing or writings 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 parol evidence rule.
- 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.
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 of a question of interpretation or to application of the parol evidence rule.
UCC § 2-202 calls this a "complete and exclusive statement of the terms of the agreement."
UCC § 2-202 calls this a "final expression of the parties' agreement."
What is the effect? (Is it partial or complete?)
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 that they are within its scope.
- 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.
Contradiction of Integrated Terms
Except as stated in the preceding Section, 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.
Consistent Additional Terms
- 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
- agreed to for separate consideration, or
- such a term as in the circumstances might naturally be omitted from the writing.
Is there an exception?
Evidence of Prior or Contemporaneous Agreements and Negotiations
Agreements and negotiations prior to or contemporaneous with the adoption of a writing are admissible in evidence to establish
- that the writing is or is not an integrated agreement;
- that the integrated agreement, if any, is completely or partially integrated;
- the meaning of the writing, whether or not integrated;
- illegality, fraud, duress, mistake, lack of consideration, or other invalidating cause;
- ground for granting or denying rescission, reformation, specific performance, or other remedy.
The parol evidence rule only applies to past or contemporaneous negotiations or agreements, not subsequent agreements.
Integrated Agreement Subject to Oral Requirement of a Condition
Where the parties to a written agreement agree orally that performance of the agreement is subject to the occurrence of a stated condition, the agreement is not integrated with respect to the oral condition.