Contracts - Parol Evidence
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Performance of K- Topics
- 1. Parol-Evidence Rule
- 2. Warranties
- 3. Conditions
- 4. Excuse of Performance Obligations (Impracticability, Frustration of Purpose, etc.)
Performance of K - Parol-Evidence Rule (Step 1)
- Step 1: Determine what the agreement entails. If you see a written K that the court finds is the final agreement and there are earlier oral or written statements about the same deal, think PER.
- 1. PER does NOT apply to later written or oral statements about the deal.
- 2. PER does apply to earlier written documents.
Performance of K - Parol-Evidence Rule (Step 2a)
- Step 2: Have the parties created an integrated writing?
- 1. Complete Integration —> Means that the K expresses ALL terms of the agreement.
- 2. Partial Integration —> Means that there is a writing and final writing, but some terms are not included
Performance of K - Parol-Evidence Rule (Step 2b)
- **Distinguishing an agreement that is NOT INTEGRATED from one that is completely or partially integrated. Look for MERGER CLAUSE.
- CL —> Courts may also ask whether, under the circumstances, an extrinsic term of the agreement would “NATURALLY BE OMITTED” from the writing. If so, it may not violate the PER and can be introduced as evidence if it does not contradict the writing.
- UCC —> The UCC universe is more forgiving, presuming that a writing is, at most, only a partial integration—UNLESS the parties would have CERTAINLY included a disputed term in the writing.
Performance of K - Parol-Evidence Rule Exceptions (Step 3)
- Rule: There are some situations in which the parol-evidence rule DOES NOT apply to bar earlier evidence.
- 1. Defense against K formation —> The PER DOES NOT bar evidence relevant to a defense against K formation (duress, mistake, fraud, etc.)
- 2. Separate Deal —> Even if a writing is totally integrated, a party can introduce evidence of a separate deal.
- 3. Prior Communication —> Even if a writing is totally integrated, a party might be able to introduce evidence of a prior communication that is designed to interpret an ambiguous term in the final agreement.
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