Parol Evidence Rule Flashcards
When does the parol evidence rule apply?
When the written K is finally signed
- it may or may not include all of the terms of the negotiations OR
- it may change the terms in some way
The parol evidence rule prevents a party from presenting prior extrinsic evidence that contradicts the terms of the K as written
- Can any of the earlier oral or written terms be part of the K even if they aren’t in the written agreement
Is the parties writting integrated?
Did the parties intend it to be their final agreement?
- PE only applies to a documnent that is an integration
- Final expression of the parties
Total Integration
Writing completely expresses all of the terms of the parties agreement
- Can’t introduce extrinsic evidence (oral or written) of prior contemporaneous understandings or negotiations
Partial Integration
Writing sets forth the parties agreement about some terms but not all of them
- Can intro. supplementary extrinsic ev. (oral or written) of the terms so long as the ev. is consistent with the writing
- NOT if the ev. contradicts the terms of the writing
How do you determine whether there is total, partial, or no integration ?
You look to the intent of the parties
- Common-law 4 corners rule
- Second restatement rule
- UCC Rule
Common Law four corners rule
Court can only look to the writing itself (w/in 4 corners of the doc.) for ev. of intent
- Evidence of total integration
- K appeared to be detailed
- Merger clause “this K is the final and complete expression of the parties”
Second Restatement Rule
If Under the circ, an extrinsic term of the agreement would naturally be omitted from a writing
- The term can be introduced so long as it doesn’t contradict the writing
UCC Rule
Presumes that a written K is only a partial integration
- Allows any outside terms
- unless, court concludes the parties certainly would have included the term in the written agreement
When does the parol evidence rule not apply?
- Doesn’t apply to communications occuring after the execution of the written K AND
- when parties are:
- Raising a defense to formation
- Rasing a defence to enforcement
- Proving condition precedent to the existence of K
- Interpreting/Clarifying ambiguity in K
- Ev. represents a distinct & sep. Deal
- Ev. of agmt. b/w the parties subsequent to execution of the writing
- UCC - Trade Usage & Course of Perf. or Dealing
Raising a Defense to the Formation of a K
PE is inapplicable
- Mistake, misunderstanding, misrep.
- Parties can always intro. ev. that would show no valid K exists or that the K is voidable
Est. a defense to the enforcement of the K
PE doesn’t apply to ev. offered to est. a defense of:
- Mistake, misrep., incompetence, illegality, duress or lack of consideration
Ambiguity & Interpretation
Ev. can be admitted for the purp. of interpreting or clarifying an ambiguity in the agreement
- Can inlcude ev. of trade usage or local custom
- Plain Meaning Rule & Context rule
Plain Meaning Rule
- The objective definitions of contract terms control the meaning of the K,
- regardless of whether the meaning corresponds with the actual intent of the parties
- Sometimes, Courts will gooutside the doc. to clarify the ord. meaning of terms
Context Rule
Some states use a contextual approach to K interp.
- Judges determine the contract’s meaning by considering all ev. of the facts & cric. related to the trans
- Goal - get the parties actual K objectives & purposes
UCC Rule - Trade Usage, & Course of perf. or Dealing
Party may explain or supplement the terms by evidence of trade usage or curse of perf. or dealings
- If the express K terms are inconsistent w/ course of perf., course of dealing, or trade usage priority is given as follows:
- Express terms prevail over all others
- COP prevails over COD & TU
- COD prevails over TU
