Parol Evidence

Question 1

What does the parol evidence rule do?

Answer 1

Prevents introduction of prior extrinsic evidence that contradicts terms of written K

Question 2

What does “integration” mean?

What are the different levels of integration?

Answer 2

Parties intended writing to be their final agreement, it determines whether the P/E rule applies.

Two levels of integration
-> total integration
-> partial integration
-> no integration

Question 3

How does the P/E Rule work with regard to total integration?

Answer 3

Total integration
-> complete expression of all terms of parties agreement
-> parties CANNOT introduce extrinsic evidence (written OR oral) of prior OR contemporaneous understandings or negotiations

Question 4

How does the P/E Rule work with regard to partial integration?

Answer 4

Partial integration
-> if writing sets forth only some terms, then parties are PERMITTED to introduce supplementary extrinsic evidence (oral OR written) of other terms that are CONSISTENT with writing (not contradictory)

Question 5

How do you determine if there is total, partial, or no integration under
-> general rule
-> the CL,
-> 2nd Restatement,
-> UCC?

Answer 5

General rule:
-> Look at the intent of the parties

CL
-> four corners rule - can only look to writing itself for intent and NOTHING ELSE
-> the more detailed the writing, the likelier the court finds there to be TOTAL integration

Second restatement
-> If an extrinsic term of agreement would “naturally be omitted from a writing,” then term can be introduced so long as it ISN’T CONTRADICTORY

UCC
-> assumes written K is only a partial integration and allows almost any outside terms as long as they’re CONSISTENT with the terms of the K

Question 6

What does a merger clause demonstrate under the CL’s four corner rule?

Answer 6

Demonstrates complete integration.

Question 7

When does the P/E rule not apply?

Hint there are 8.

Answer 7

Does not apply to
-> communications occurring AFTER the execution of the written K

Does not apply when there is TOTAL integration BUT parties are (partial list):
-> raising a defense to formation
-> raising a defense to enforcement
-> offering evidence with regard to a distinct and separate deal
-> providing condition precedent to existence of the K
-> interpreting/clarifying ambiguity in K through the plain meaning rule OR context rule
-> evidencing agreements between the parties subsequent to execution of the writing (aka subsequent agreements)
-> UCC - supplementing even apparently unambiguous terms by evidence of trade usage or course of dealing (priority, highest to lowest: express terms, course of performance, course of dealing, trade usage)

Question 8

What is the plain meaning rule?

Answer 8

This rule provides that the objective definitions of contract terms control the meaning of the contract, regardless of whether the meaning corresponds with the actual intent of the parties. Sometimes, courts will go outside the document to clarify the ordinary meaning of terms that are ambiguous or overly vague.

Question 9

What is the context rule?

Answer 9

Some states permit courts to use a contextual approach to contract interpretation. Under the context rule, judges determine the contract’s meaning by considering all evidence of the facts and circumstances related to the transaction. The goal is to effectuate the parties’ actual contract objectives and purposes.