Parol Evidence Rule

Question 1

Parol Evidence Rule

Answer 1

Extrinsic evidence may not be used to prove a fact of an agreement in the face of a writing

Question 2

Parol evidence that we are concerned with

Answer 2

evidence prior to or contemporaneous with the forming of the contract…any subsequent evidence is not barred by PER

Question 3

Main issue in whether extrinsic evidence will be allowed is

Answer 3

Main issue in whether extrinsic evidence will be allowed is the intent of the parties

• If parties intended writing to cover the whole agreement, then no parol evidence will be allowed.
• If parties simply intended the writing to memorialize part of the agreement, then parol evidence may be allowed.

Question 4

Extrinsic evidence may:

Answer 4

Extrinsic evidence may:

1. Contradict the k
2. Add to the k
3. Explain the k

Question 5

Document is fully integrated when it

Answer 5

Document is fully integrated when it represents the final expression of the parties’ agreement.

Question 6

Parol evidence will always be allowed to show

Answer 6

Parol evidence will always be allowed to show fraud, duress, or mistake during formation of the contract

Question 7

A party may reform a writing if:

Answer 7

A party may reform a writing if:

1. They can prove beyond a reasonable doubt that the reformation is the true agreement.
2. They must prove that there was a mistake.
3. They must establish that there was no prejudice (aka there has been no prejudicial change of position by the other party while ignorant of the mistake).

May use extrinsic evidence to show this.

Question 8

Thompson v. Libbey (p. 468)

verbal warranty as to quality of purchased logs

Answer 8

• Argument over quality of contracted logs, whether a certain quality (verbal warranty) was implicit in contract. I: can a verbal warranty be admissible as evidence when whole of contract is in writing?
• Court excludes oral warranty (alleged by Libbey) from evidence because written agreement purports to be full document.
• When have written contract void of uncertainty, conclusively presumed that written contract represents final agreement, side discussions are irrelevant.

Question 9

Brown v. Oliver (p. 484)

sale of hotel, fight over furniture

Answer 9

​Parties discussed sale of hotel to include furniture but final contract did not include it

Court allowed extrinsic evidence on whether contract included furniture, even though not in contract

• was writing intended to cover all subjects or just some subjects? (depends wholly on parties’ intent
• intent of parties determined from conduct and language of parties and surrounding circumstances
• in deciding upon intent, see if particular element of the alleged extrinsic negotiation is dealt with at all in writing
• Writing was not complete & integrated such to exclude the furniture; thus the contract is considered partially integrated (final with regard to the land but silent about furniture)
• When the writing is completely silent on the issue in question, court is generally more willing to believe that it wasn’t covered.

Question 10

Intent of the parties

Answer 10

Intent = Final writing + complete memorialization of the agreement

• If parties intended writing to cover the whole agreement, then no parol evidence will be allowed.
• If parties simply intended the writing to memorialize part of the agreement, then parol evidence may be allowed.

Question 11

Modern Rule concerning extrensic evidence

Answer 11

Extrinsic Evidence may be allowed to judge the intent of the parties

• Completeness is a question of law…judge provisionally allows it to determine intentà court may consider the words and conduct of the parties, in addition to the circumstances surrounding the deal
• If the court finds that the parties intended the writing to be complete, the jury will not be allowed to consider the parol evidence at trial.

Question 12

Collateral Agreement

Answer 12

Collateral Agreement –> Agreement apart from the subject of the contract, but agreed to nonetheless (PER does not bar evidence concerning collateral agreements)

Question 13

Parol Evidence Rule

Analysis

Answer 13

Step 1: Determine Timing: Was the parol evidence prior to/contemporaneous with the agreement?

If no…there is no PER problem, the evidence is admissible.
If yes…go to step 2.

Step 2: Is there a merger clause?

Merger Clause says that writing merges all agreements between the parties
If yes…that’s it. PER does not allow evidence to be presented.
If no…go to step 3.

Step 3: Did parties intend writing to be final expression of their agreement (final writing)?

If writing not final…PER does not apply, evidence is admissible.
If writing was intended to be final…go to step 4.

Step 4: Did parties intend writing to be complete?

Main question: Is the writing obviously incomplete?

If yes: extrinsic evidence may be allowed as long as the fact to be established does not conflict with the writing (Partially integrated agreement)

If noà party may introduce extrinsic evidence to show intent of the parties unless the court finds that it would have been unnatural for the parties to leave that out (if it had been agreed upon) (Fully Integrated Agreement)

Question 14

3 issues to consider for

Parol Evidence Rule Analysis

Answer 14

1. Is the dispute over a widely used term of trade?
2. Is there a difference between a general and a specific meaning?
3. Have the parties dealt with one another previously?

Question 15

§209 Integrated agreements

Answer 15

** a final expression **

Question 16

§216: consistent additional terms

Answer 16

(1) evidence of a consistent additional term is admissible to supplement an integrated agreement unless the court finds that the agreement was completely integrated;
(2) an agreement is not completely integrated if the writing omits a consistent additional agreed term which is
(a) agreed to for separate consideration;
(b) such a term as in the circumstances might naturally be omitted from the writing.

Question 17

Thompson v. Libbey

verbal warranty as to quality of purchased logs

Answer 17

I: can a verbal warranty be admissible as evidence when whole of contract is in writing?

R: No, PE not allowed because the written contract seems complete – fully integrated – therefore any PE evidence that alters or adds to contract is inadmissible.

Question 18

Brown v. Oliver,

sale of hotel, fight over furniture

Answer 18

F: Parties discussed sale of hotel to include furniture but final contract did not include it.

I: Should furniture term be considered part of the agreement even though it was not written into actual contract?

R: PE admissible based on Wigmore treatise:

• Was writing intended to cover all subjects or just some subjects? (depends wholly on parties’ intent)
• Intent of parties determined from conduct and language of parties and surrounding circumstances
• In deciding upon intent, see if particular element of the alleged extrinsic negotiation is dealt with at all in writing