Parol Evidence Rule

Question 1

What situation does PER come up?

Answer 1

An agreement has been reduced to writing, but one party claims there was also an earlier oral or written agreement or a contemporaneous oral agreement that was not included in the writing but was intended to be part of the contract.

Question 2

What is the parol evidence rule, generally?

Answer 2

The parol evidence rule generally prevents a party to a written contract from presenting extrinsic evidence of a prior or contemporaneous agreement that contradicts the terms of the contract as within.

Question 3

Break down the definition of parol evidence

Answer 3

An alleged earlier oral or written agreement or an alleged contemporaneous oral agreement

Question 4

What is step 1 in a PER analysis?

Answer 4

Determine if the writing is integrated

Question 5

What is an integrated document?

Answer 5

One that is intended to be the final expression of the parties’ agreement

Question 6

What are examples of documents that are not integrated?

Answer 6

Preliminary negotiation document; tentative draft agreement

Question 7

List the 3 avenues for determining intent as to integrated documents

Answer 7

1. Common law four corners rule
2. Second restatement rule
3. UCC Rule 2-203

Question 8

What is the common law four corners rule for determining intent as to integration?

Answer 8

Only the writing itself is evidence of intent

Question 9

What is the formal intent theory used to support the common law four corners rule for determining intent as to integration?

Answer 9

A writing is treated as an integration if, taken as a whole and on its face, it appears to be an instrument that expresses the parties’ final agreement.

Question 10

What is the actual intent theory used to support the common law four corners rule for determining intent as to integration?

Answer 10

A writing is treated as an integration only if the parties actually intended it to be an integration. Courts will consider any relevant evidence to determine the parties’ intent.

Question 11

Which party will want to enforce which theory under the common law four corners rule in establishing intent as to integration?

Answer 11

The party that wants the parol evidence in will try to use the actual intent theory

Question 12

What is the second restatement rule for determining intent as to integration?

Answer 12

If, under the circumstances, an extrinsic term of an agreement would naturally be omitted from a writing, then that term can be introduced, so long as it does not contradict the writing.

Question 13

What is the UCC Rule 2-203 for determining intent as to integration?

Answer 13

UCC essentialy presumes that a written document is only a partial integration and allows consistent terms unless a court concludes that the parties certainly would have included them in the written contract. Because something on the contrary would be difficult to establosh, parol evidence almost always comes in under the UCC.

Question 14

What is a merger/integration clause?

Answer 14

A merger clause/integration clause is a provision in a contract that states that the contract:
* contains the complete and final agreement between the parties
* supersedes any other oral or written agreements between the parties on the same subject matter

Question 15

Who is going to argue against the merger clause?

Answer 15

The party trying to get the parol evidence in by arguing that it is invalid

Question 16

What is the purpose of the merger clause?

Answer 16

To (1) attempt to cause a cort to look only within the document itself and enforce the terms of the contract and (2) prevent either party from claiming that the contract does not represent their entire understanding of the terms of the agreement.

Question 17

What is step 2 of a PER analysis?

Answer 17

Determine whether the writing is fully integrated or partially integrated

Question 18

What is fully/totally integrated document?

Answer 18

One that completely expresses all of the terms of the parties’ agreement

Question 19

What is a partially integrated document?

Answer 19

Where the writing sets forth the parties’ agreement about some terms but not all terms

Question 20

What is the effect of a total integration?

Answer 20

If fully integrated, parol evidence cannot be introduced

Question 21

What is the effect of a partial integration?

Answer 21

Parol evidence is allowed as long as it is consistent with the writing, but not if the evidence contradicts the terms of the writing.

Question 22

What is step 3 of a PER analysis?

Answer 22

Determine whether there is an exception to PER

Question 23

What is the separate consideration exception to PER?

Answer 23

Parol evidence is admissible if the written integration and the alleged parol evidence are each supported by separate consideration because they are arguably two separate contracts.

Question 24

What is the collateral agreement exception to PER?

Answer 24

Parol evidence is often said to be admissible if the alleged parol agreement is collateral to (i.e., related to the subject matter but not part of the primary promise of) the written integration and does not conflict with the integrated writing.

Question 25

What is the naturally omitted consistent terms exception to PER?

Answer 25

Adopted by the second restatement rule for intent. Parol evidence is admissible if it concerns a term that would be naturally omitted from the written agreement.

Question 26

When would a term be “naturally omitted”?

Answer 26

A term would be naturally omitted if:
* The term does not conflict wit hthe written integration; and
* Similarly situated parties would not ordinarily be expected to include the term in the written agreement

Question 28

What are 5 additional exceptions to PER?

Answer 28

1. Raising a defense to contract formation
2. Establishing defense to contract enforcement (i.e., if the parol evidence would make the contract void or voidable)
3. Establishing a condition precedent ot the existence of a contract
4. Ambiguity and interpretation
5. Trade usage and course of dealing or performance