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Parol Evidence Rule

Parol Evidence Rule. Contracts – Prof. Merges March 14, 2011. Happy Birthday Ms Taylor!. Where are we going?. Formation; Remedies “The law of the contract” – interpretation; substantive K rights. Parol Evidence Rule  Meaning? “Holy Roman Empire” analogy Evidence? “Rules”?.

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Parol Evidence Rule

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  1. Parol Evidence Rule Contracts – Prof. Merges March 14, 2011

  2. Happy Birthday Ms Taylor!

  3. Where are we going? • Formation; Remedies • “The law of the contract” – interpretation; substantive K rights

  4. Parol Evidence Rule  Meaning? • “Holy Roman Empire” analogy • Evidence? • “Rules”?

  5. Gianni v. R. Russell & Co.

  6. Gianni v. R. Russell & Co. • Facts • Procedural History

  7. What did Gianni want to prove at trial; what is he arguing he should have been allowed to prove?

  8. Draft agreement with “Gianni’s term” in it • “use the premises for the sale of fruit, candy, soda water, etc.”

  9. Draft agreement with “Gianni’s term” in it • “use the premises for the sale of fruit, candy, soda water, etc., Gianni to be the only tenant allowed to sell this type of merchandise” • Exclusivity clause

  10. Is this a case of interpreting the K?

  11. Is this a case of interpreting the K? • No; Gianni wants to introduce evidence that the parties agreed to something else beyond the written K

  12. Why did court not “reform” the K?

  13. Why did court not “reform” the K? • No fraud, mistake, accident – top p. 369

  14. Terminology/analysis • “independent oral agreement” • “When does the oral agreement come within the field” of the written K?

  15. What is the holding?

  16. What is the holding? • Why does the court say that the written agreement was “the entire contract”, or the “complete contract”  p. 370, top: “As the written lease is the complete . . .”

  17. Independent K argument • Question: is the TERM sought to be admitted within the same Field, Scope, or Subject as the written K? • If SO, it is unlikely to be the subject of a separate K . . .

  18. § 209. Integrated Agreements • (1) An integrated agreement is a writing or writings constituting a final expression of one or more terms of an agreement. • (2) Whether there is an integrated agreement is to be determined by the court as a question preliminary to determination of a question of interpretation or to application of the parol evidence rule.

  19. (3) Where the parties reduce an agreement to a writing which in view of its completeness and specificity reasonably appears to be a complete agreement, it is taken to be an integrated agreement unless it is established by other evidence that the writing did not constitute a final expression.

  20. § 210. Completely And Partially Integrated Agreements (1) A completely integrated agreement is an integrated agreement adopted by the parties as a complete and exclusive statement of the terms of the agreement. (2) A partially integrated agreement is an integrated agreement other than a completely integrated agreement.

  21. (3) Whether an agreement is completely or partially integrated is to be determined by the court as a question preliminary to determination of a question of interpretation or to application of the parol evidence rule.

  22. § 213. Effect Of Integrated Agreement On Prior Agreements (Parol Evidence Rule) • (1) A binding integrated agreement discharges prior agreements to the extent that it is inconsistent with them. • (2) A binding completely integrated agreement discharges prior agreements to the extent that they are within its scope.

  23. Gianni • Completely integrated agreement; could not introduce evidence of consistent additional term

  24. Why would a party such as Russell favor this rule?

  25. Why would a party such as Russell favor this rule? • Written K’s on file . . . • Less opportunity for sympathetic jury to help out the little guy

  26. Masterson v. Sine

  27. Masterson v. Sine • Facts • Procedural History

  28. Masterson • What term did the Sines wish to introduce into the contract?

  29. Masterson • What term did the Sines wish to introduce into the contract?  Option “limited to family members,” or “personal to the Mastersons”

  30. Analyze in terms of R2d

  31. Analyze in terms of R2d • Integrated? • Complete or partial?

  32. Additional points • “Default rule” – read into K? (free alienability of options) • No reformation here either

  33. Drafting solution • How could the grant deed/K have been drafted to prevent the introduction of evidence re: the “keep it in the family” clause?

  34. Drafting solution • How could the grant deed/K have been drafted to prevent the introduction of evidence re: the “keep it in the family” clause? • Complete integration clause – probably

  35. Bollinger v. Central PA Quarry

  36. Bollinger v. Central PA Quarry • Facts • History • Holding

  37. Limits on reformation • When will it be applied?

  38. Reformation • “there was a mistake between the parties, [it] was real and not feigned, actual and not hypothetical” • How does the court know that here?

  39. Evidence • Immediate objection • Contractor at first cleared away topsoil and replaced • Contractor’s actions on neighboring land accorded with plaintiff’s version of the K

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