Parol Evidence Rule Overview

These flashcards cover the key concepts related to the Parol Evidence Rule, including its application, the types of agreements, and relevant court rulings.

What evidence is always allowed under the Parol Evidence Rule?

Extrinsic evidence is admissible to determine whether a contract is integrated (modern approach), the degree of integration (modern approach), the interpretation of terms (modern and traditional, so long as deemed ambiguous on its face), and the always invalidating causes (such as fraud, duress, or mistake).

What is the Parol Evidence Rule?

The rule determines whether parties may introduce extrinsic evidence of prior or contemporaneous agreements to change or supplement a final written contract.

When does the Parol Evidence Rule apply?

It applies only if there is a final written agreement, also known as an integrated agreement.

What happens if there is not a final agreement?

The Parol Evidence Rule does not apply, and any extrinsic evidence is admissible.

What does the Parol Evidence Rule prohibit?

It prohibits extrinsic evidence that contradicts a final writing, and if the writing is fully integrated, it also prohibits adding additional terms.

What is step one of the Parol Evidence Rule analysis?

To determine whether the agreement is integrated.

What is integration?

Whether the parties intended the writing to be a final expression of their agreement.

What are the types of integration?

Fully integrated, partially integrated, and not integrated.

What is a fully integrated agreement?

A final and complete expression of the parties’ agreement, so no parol evidence is admissible to supplement or contradict it.

What is a partially integrated agreement?

A final but not complete expression, so parol evidence may supplement with consistent additional terms but may not contradict the writing.

What is a non-integrated agreement?

A writing that is not final, so the Parol Evidence Rule does not apply and any extrinsic evidence is admissible.

What is a merger (integration) clause?

A provision stating the contract is the complete and exclusive expression of the parties’ agreement, superseding prior negotiations. It is the best evidence of a fully integrated agreement.

What is the effect of a merger clause under the traditional (Williston) approach?

It is treated as conclusive evidence of full integration unless there is an exception.

What is the effect of a merger clause under the modern (Corbin) approach?

It is not conclusive in determining the level of integration, but it is strong evidence of intent, and courts consider the surrounding circumstances.

What test is used in Mitchell v. Lath?

Parol evidence will be excluded unless (1) it would not naturally and normally appear in the contracts, (2) it does not contradict the writing, and (3) it is a collateral agreement to the contract.

What happens if a term would naturally be included under Mitchell v. Lath?

The agreement is treated as fully integrated and the evidence is excluded.

What happens if a term would not naturally be included under Mitchell v. Lath?

The agreement may be partially integrated and the evidence may be admitted if it meets the other criteria.

What is the rule from Masterson v. Sine (modern approach)?

Parol evidence is admissible unless the court finds the writing was intended as a complete and exclusive statement of the terms.

What 2 factors and 4 sub factors do courts consider under the modern approach?

Courts look to the parties' (1) intent as demonstrated by the (2) circumstances. They consider (a) context, (b) purpose of the agreement, (c ) whether the writing is silent on the term, and (d) whether the term would naturally be separate.

What happens if extrinsic evidence contradicts the writing?

The evidence is excluded.

What happens if extrinsic evidence does not contradict the writing?

The evidence may be admitted.

What are the key facts of Mitchell v. Lath?

Buyer purchased land from seller. Seller orally promised to remove an unsightly icehouse on nearby land, but the written contract did not include this promise. Buyer later sued to enforce the oral promise.

What did the court hold in Mitchell v. Lath?

The court refused to admit the oral agreement because it would naturally have been included in the written contract, so the writing was treated as fully integrated and the evidence was excluded.

What are the key facts of Masterson v. Sine?

A family conveyed land with a written option to repurchase. The writing did not say whether the option was assignable. A bankruptcy trustee tried to exercise the option, and the family argued there was an oral agreement that it was only for family members.

What did the court hold in Masterson v. Sine?

The court allowed extrinsic evidence because the writing was not clearly complete, and the oral term (limiting assignment) would not necessarily be included in the writing since it was a family contract.

What is the key takeaway from Masterson v. Sine?

Courts will admit extrinsic evidence unless the writing is clearly a complete and exclusive statement, focusing on intent and surrounding circumstances (modern approach).

Special rule for contemporaneous written agreements under the common law?

Under the common law approach, courts read contemporaneous written documents together as one combined writing in order to give effect to the parties’ intent, since documents executed at the same time are not viewed as superseding one another.

Special rule for contemporaneous written agreement under the UCC and common law?

Common law and UCC parol evidence rule do not exclude consistent/contemporaneous written agreements, since documents executed at the same time are not viewed as superseding one another.

What about evidence of a condition precedent?

Oral evidence of a condition precedent is not barred by the Parol Evidence Rule because it does not vary or contradict the agreement's terms.

What is a collateral agreement under Mitchell?

It is an agreement that is outside the scope of the written contract.