Parol Evidence Rule

Question 1

Parol Evidence Rule - Core Concept

Answer 1

• when parties to a K express their agreement in a writing w/ the intent that it embody the final expression of their bargain, the writing is an “integration”
  -> any other expressions (written or oral) made prior to the writing, as well as any expressions contemporaneous with the writing, are inadmissible to vary the terms of the writing

Question 2

Is the Writing an “Integration”?

Answer 2

Two components to evaluate:
1) whether the writing was intended as the final expression of the agreement AND
2) whether the integration was intended to be complete or partial

• evidence IS admissible to show parties’ intent on these points

Question 3

Partial Integration

Answer 3

• means writing can be supplemented by proving consistent additional terms
  -> CAN’T contradict the writing though
• vs. complete integration, NO contradiction OR supplementing

Question 4

Partial Integration - UCC

Answer 4

• UCC presumes all writings are partial integrations

Question 5

Merger Clause

Answer 5

• a clause that recites that the agreement is the complete agreement between the parties
• presence of such a clause is usually determinative in large commercial Ks
• BUT for most Ks, modern trend is to consider it as one factor in determining integration

Question 6

Integration and Memos

Answer 6

• a memo prepared by one party + not shown to other can never be an integration b/c parties couldn’t have intended it to be final complete expression of their agreement when one party has not even seen it
  -> memo = merely evidence of agreement
• confirmatory memo may be a partial integration under UCC b/c was sent to other party + that party was aware of its contents

Question 7

Evidence Outside Scope of Parole Evidence Rule

Answer 7

• b/c the rule prohibits admissibility only of extrinsic ev that seeks to vary, contradict, or add to an “integration”, other forms of extrinsic ev may be admitted if they won’t bring about this result
  -> fall outside scope of the rule

Question 8

Validity Issues

Answer 8

• party to a written K can attack the agreement’s validity
• party usually acknowledges that the writing reflects the agreement but asserts that the agreement never came into being b/c of:
  -> formation defects OR
  -> conditions precedent to effectiveness

Question 9

Formation Defects

Answer 9

• ex: fraud, mistake, illegality, duress
• can be shown by extrinsic ev, EVEN despite parol ev rule

Question 10

Conditions Precedent to Effectiveness

Answer 10

• if a party asserts that there was an oral agreement that the written K wouldn’t become effective until a condition occurred, all ev of the understanding may be offered and received

Question 11

Collateral Agreements

Answer 11

• parol ev often said to be admissible if alleged parol agreement = collateral to written ob (related to subject matter but not part of primary promise)

Question 12

Naturally Omitted Terms Doctrine

Answer 12

• allows ev of terms that would naturally be omitted from the written agreement

Would naturally be omitted if:
1) doesn’t conflict w/ the written integration AND
2) concerns a subject that similarly situated parties wouldn’t ordinarily be expected to include in the written instrument

Question 13

Interpretation

Answer 13

• if there’s uncertainty or ambiguity in the written agreement’s terms or dispute as to meaning of those terms, parol ev can be received to aid factfinder in reaching a correct interpretation of the agreement
• BUT if the meaning of the agreement is plain, parol ev is NOT admissible

Question 14

Showing of “True Consideration”

Answer 14

• parol ev rule won’t bar extrinsic ev showing the “true consideration” paid
  -> ex: ev that the consideration stated in the K was never paid

Question 15

Reformation

Answer 15

• if a party to a written agreement alleges facts (ex: mistake) entitling him to reformation of the agreement, the parol ev rule is inapplicable

Question 16

Subsequent Modifications

Answer 16

• parol ev can be offered to show subsequent mods of a written K

Question 17

Additional Terms Under Article 2

Answer 17

• Art 2 generally follows the rules discussed above, providing that a party can’t contradict a written K but may add consistent additional terms UNLESS:
  1) there’s a merger clause OR
  2) courts find from all of the circumstances that the writing was intended as a complete + exclusive statement of the terms of the agreement
• Art 2 also provides that written K’s terms can be explained or supplemented by ev of course of performance, course of dealing, + usage of trade (regardless of whether or not the writing appears ambiguous)