1.
See Restatement § 213 a.
When there is an integrated agreement, the agreement consists of the final expression of the parties’ negotiations; terms that are inconsistent with the contract are not part of the agreement. b.
Parol Evidence is any evidence of negotiations or dealings prior to the contract’s execution that did not end up in the contract (can be spoken, written, etc.).
2.
Restatement § 209: a.
(1) An integrated agreement is a writing or writings constituting a final expression of one or more terms of an agreement. b.
(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. c.
(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.
3.
Where parties, without any fraud or mistake, have deliberately put their engagements in writing, the law declares the writing to be not only the best, but the only evidence of the agreement
4.
Where there is a mutual mistake between the parties, parol evidence may be used to prove the terms of the contract.
5.
Parol evidence may be used to show that a contract is not valid due to a.
Duress b.
Fraud c.
Minority/mental defect
6.
The UCC addresses the use of parol evidence in § 2-202. a.
How this differs from the Restatement: Under the UCC, parol evidence of the parties’ course of dealing, usage, or trade, or of their course of performance is admissible.
7.
No-Oral Modification Clauses a.
General view: Clauses purporting to forbid any future oral modifications are generally not enforced. i.
But, the UCC does allow some no-oral modification clauses, but only in limited circumstances and with several exceptions. See UCC § 2-209.
8.
The Use of Parol Evidence to Prove Intent a.
The first step i.
determine whether the contract is ambiguous. Courts differ on what evidence parties can use to prove ambiguity. b.
Second Step i.
if so, what does the ambiguous term mean in this K?
9.
California rule

a.
Parties can use extrinsic evidence to show that a contract is “reasonably susceptible” to a different meaning. i.
“[R]ational interpretation requires at least a preliminary consideration of all credible evidence offered to prove the intention of the parties.” b.
two steps in the California Rule: i.
(1) The court will use the extrinsic evidence to determine if the contract is reasonably susceptible to another interpretation; ii.
(2) Then, if it is reasonably susceptible, the court will consider extrinsic evidence in determining the actual meaning of the contract.
10.
The New York Rule (4-cornors rule) a.
“[e]xtrinsic evidence of the parties’ intent may be considered only if the agreement is ambiguous” on its face. i.
This means that if you had only the contract, there are at least two possible meanings for its contents. b.
Policy justifications: i.
Stability in commercial-type transactions ii.
Prevention of memory-loss leading to lawsuits iii.
Prevention of the jury improperly weighing extrinsic evidence
1.
Also known as the “plain meaning rule.”
11.
NY v. Cali rule a.
The central difference between the two states’ rules is that under the New York rule, “extrinsic and parol evidence is not admissible to create an ambiguity in a written agreement which is complete and clear and unambiguous on its face.”
12.
Criticism of the Cali Rule a.
it leads only to frustration and delay for most litigants and clogs already overburdened courts. It chips away at the foundation of our legal system. By giving credence to the idea that words are inadequate to express concepts, [the
California rule] undermines the basic principle that language provides a meaningful constraint on public and private conduct.”
13.
When UCC applies to Parol Evidence a.
UCC § 1-303 i.
Course of Performance
1.
Refers to the same K
2.
what the parties have done under that contract up until that point ii.
Course of Dealing
1.
Refers to multiple previous Ks of the same sort
2.
How the parties have behaved under their similar previous contacts iii.
Usage of Trade

1.
E.g. A and B have never done business before, but the item at issue is always done the same way in the trade by everyone conducting business in the trade iv.
EXCEPTION “express terms [in a K] prevail” v.
Hierarchy
1.
Course of Performance, PREVAILS OVER
2.
Course of Dealing, PREVAILS OVER
3.
Trade Usage.