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Contracts 2
Ole Miss - Bradley
25
Law
Graduate
03/13/2011

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Cards

Term
Def of Parol Evidence Rule
Definition
If there is a binding agreement that is either completely or partially integrated, evidence of prior agreements or negotiations is NOT admissible to contradict a term of the writing
Term
integration
Definition
process of expressing the parties’ intent in a way that does NOT allow either party to contradict expression
Term
2 types of integration
Definition
i.      complete: cannot be contradicted OR supplemented // ii. partial: cannot be contradicted, but may be supplemented by evidence of consistent additional terms
Term
integrated agreement
Definition
writing constituting final expression of parties intent as to one or more terms
Term
5 questions to ask to determine if P/E rule applies
Definition
1. Is #2 (2nd agreement) a binding agreement? (213)
• If NO, P/E rule does NOT apply
• Evidence is admissible to show that an agreement is NOT binding b/c of lack of consideration, fraud, mistake, unconscionability, etc.
2. Is #2 an integrated (final) agreement? (213, 209)
• If NO, P/E rule does NOT apply

3. Is #2 a COMPLETELY integrated agreement?
• § 210- an agreement that is intended by both parties to be a complete and exclusive statement of the terms of the agreement
• partial integration: wipes out inconsistent term
• complete integration: wipes out w/in scope

4. Is #1 inconsistent w/ #2? (213, 216)
• if NO (1 and 2 are consistent), then P/E rule does NOT apply
• inconsistent: the term must contradict or negate a term of the writing

5. Is #1 w/in the scope of #2?
• if NO, then P/E rule does NOT apply
Term
general rule of P/E
Definition
parol evidence is ALWAYS admissible to show that agreement is voidable
Term
Def of Parol Evidence Rule
Definition
If there is a binding agreement that is either completely or partially integrated, evidence of prior agreements or negotiations is NOT admissible to contradict a term of the writing
Term
integration
Definition
process of expressing the parties’ intent in a way that does NOT allow either party to contradict expression
Term
2 types of integration
Definition
i.      complete: cannot be contradicted OR supplemented // ii. partial: cannot be contradicted, but may be supplemented by evidence of consistent additional terms
Term
integrated agreement
Definition
writing constituting final expression of parties intent as to one or more terms
Term
5 questions to ask to determine if P/E rule applies
Definition
1. Is #2 (2nd agreement) a binding agreement? (213)
• If NO, P/E rule does NOT apply
• Evidence is admissible to show that an agreement is NOT binding b/c of lack of consideration, fraud, mistake, unconscionability, etc.

2. Is #2 an integrated (final) agreement? (213, 209)
• If NO, P/E rule does NOT apply

3. Is #2 a COMPLETELY integrated agreement?
• § 210- an agreement that is intended by both parties to be a complete and exclusive statement of the terms of the agreement
• partial integration: wipes out inconsistent term
• complete integration: wipes out w/in scope

4. Is #1 inconsistent w/ #2? (213, 216)
• if NO (1 and 2 are consistent), then P/E rule does NOT apply
• inconsistent: the term must contradict or negate a term of the writing

5. Is #1 w/in the scope of #2?
• if NO, then P/E rule does NOT apply
Term
general rule of P/E
Definition
parol evidence is ALWAYS admissible to show that agreement is voidable
Term
P/E rule does not apply to evidence that shows
Definition
1. writing was never intended to be operative
2. writing was to be effective ONLY upon happening of event
3. k lacks consideration
4. k is voidable due to duress, mistake, fraud, or illegality
Term
Important distinction for P/E
Definition
P/E rule does NOT apply to agreements made AFTER signing of a K. Evidence of modifications is admissible
Term
Binding/Integrated discharges prior agreements to the extent that they are:
Definition
i. inconsistent w/ the binding, integrated agreement
ii. w/in the scope of the binding, integrated agreement
Term
If 2nd agreement ambiguous, then
Definition
evidence of prior agreements should NOT excluded as inconsistent, but should be admitted to help clarify the second agreement
Term
Modern trend as to P/E rule
Definition
: determine intentions of parties by looking at ALL credible evidence concerning agreement. Look at surrounding circumstances
• ONLY exclude that evidence that in NOT credible
Term
Merger Clauses
Definition
• Merger clause: provision in agreement that states that the written K is the entire expression of the agreement between the parties

• merger clauses can be held to be unconscionable if “sprung” on the other party
• if a merger clause is “boilerplate” then many cts will find that both parties did NOT intend to be bound by clause

• merger clauses are NOT completely controlling, but do create a presumption that the written agreement was intended to be a complete integration
Term
NOM Clauses
Definition
• Many k’s have provision that the written K CANNOT be modified orally, only in writing
• These are know as No Oral Modification (N.O.M.) clauses
• At C/L, an oral modification WAS enforceable despite NOM

• UCC 2-209 changes the C/L in 2 ways:
1. modification of K for sale of good needs NO consideration to be binding
2. If a K has a NOM, modifications must be written
Term
Plain Meaning Rule
Definition
• If a writing appears to be plain and unambiguous on its face, its meaning MUST be determined from the “4 corners” of the instrument, W/OUT resorting to extrinsic evidence
• Modern trend is NOT to follow strict interpretation of plain meaning rule
• Most cts will follow the view of Corbin: No K should ever be interpreted and enforced with a meaning that neither party gave it

• Differences between P/E rule and plain meaning rule: plain meaning rule is a principle of interpretation, but P/E rule is NOT. (rule of evidence)

• The meaning of K is a question of fact (jury question), UNLESS the question could only be answered one way by a reasonable jury
Term
General rule of trade usage
Definition
an agreement is interpreted in accordance w/ relevant usage IF:
1. each party knew or had reason to know of the usage, AND
2. neither party knew or had reason to know that meaning attached by other was NOT consistent with the usage
Term
usage of trade definition
Definition
one having such regularity of observance in a trade as to justify an expectation that it will be observed w/ respect to a particular agreement
Term
existence and scope are:
Definition
questions of fact
Term
mirror image rule
Definition
in order to exercise power of acceptance, reply must be an exact mirror image of offer
• If reply was NOT a mirror image, then it was NOT an acceptance, but a counter offer
• As more and more form K’s were being formed, there began to be “battle of the forms”
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