1. Parol Evidence Rule in retrospect A PER issue is raised when a party seeks to prove – agreement that preceded writing or oral agreement from time of writing, and – alleged agreement is not reflected in writing What evidence is affected by PER? – prior written or oral agreement, and contemporaneous oral agreement – does not affect evidence of subsequent agreements Ch.4.CThe Parol Evidence Rule1

2. PER is not applicable to [§214] Evidence of integration Evidence offered to interpret writing Evidence offered to prove non-existence or invalidity of agreement – mutual assent & consideration – affirmative defenses (e.g., statute of frauds, misrepresentation, duress, unconscionability, public policy) – impossibility and mistake defenses (forthcoming) Evidence offer to prove non-contract claim Ch.4.CThe Parol Evidence Rule2

3. Is Parol Evidence Admissible? Separate Transaction The Transaction Described in Writing Resolve Ambiguity Mistake, Formation Defenses Existence of Term Unintegrated Partially Integrated Completely Integrated Ch.4.CThe Parol Evidence Rule3

4. PER Analysis: Step 1 Is writing integrated, and if so, at what level? Four Corners Doctrine – (Davis) Objective Test – (Gianni, Williston) Subjective Test – (Masterson, Rest. (2d) §210) UCC Approach Is there a “merger” (integration) clause? Modern perspective (minority; Masterson; Nelson dissent): informative – Must be specifically agreed upon Williston’s rule (majority; Nelson): decisive – Two exceptions: instrument obviously incomplete merger clause product of fraud/mistake Ch.4.CThe Parol Evidence Rule4

5. PER Analysis: Step 2 If agreement is NOT integrated, then all evidence of other terms is admissible. If agreement is PARTIALLY integrated, evidence of additional consistent terms is admissible. – Consistency standard may be narrow (only terms that contradict integrated written terms) or broad (any terms that are not in reasonable harmony with integrated written terms) If agreement is TOTALLY integrated, then all evidence of additional terms is excluded. Ch.4.CThe Parol Evidence Rule5