Adaptibar Contracts Video 3: Contract Content and Meaning (Parol Evidence)

Question 1

What are one or both of the parties doing when they want to admit parol evidence?

Answer 1

They are trying to add more terms/elements into the already existing contract.

We negotiated or talked about this stuff before entering into the contract.

Question 2

Fill in the blank. The parol evidence must be information discussed ____________or ____________ the parties entered the contract.

Answer 2

The parol evidence must be information discussed PRIOR TO or AT THE TIME the parties entered into the contract.

Question 3

If a party is trying to add terms AFTER entering into the contract, do parol evidence rules apply?

Answer 3

NO

Question 4

How do you know parol evidence is coming in? What is step one?

Answer 4

Step one: is the contract a final or complete integration? Then parol evidence is NOT admissible.

*this means that we didn’t want anything else to come into the contract!

Question 5

Final agreements between parties usually have what?

Answer 5

A merger clause.

Question 6

If there is a final merger clause, does the parol evidence rule apply?

Answer 6

NO

Question 7

How do you know an agreement is final?

Answer 7

Look for a merger clause, a simple phrase that says, “this is the final agreement between the parties,” or a court determination that nothing else is coming into the contract

Question 8

What is the exception to the final/complete integration rule?

Answer 8

Ambiguity. If added terms are needed to clear up an ambiguous term.

Question 9

Can you bring in parol evidence in a partial integration?

Answer 9

YES

Question 10

If the contract is a partial integration, what evidence can come in?

Answer 10

Evidence that explains or supplements the original contract is admissible

Question 11

What evidence CANNOT come in for a partial integration contract?

Answer 11

Anything that contradicts or materially alters the contract is NOT admissible.

Question 12

Hypo. Jon goes to a car dealer to negotiate the purchase of a car. There is a partially integrated contract. When Jon goes to pick up the car, he asks the dealer where the leather floor mats and satellite radio are. The dealer tells him those were not in the contract. Jon tells him they talked about it, and the dealer was supposed to add in the floor mats and radio.

Can Jon add those terms?

What if Jon is changing the price of the car?

What if Jon has a contract for a Lexus but then dealer tries to make him take a Kia?

Answer 12

Yes, the added terms do not materially contradict or alter the contract, and this is a partially integrated contract, parol evidence is okay.

Changing price of the car? Or different car make entirely? Not okay. These materially change the terms.

Question 13

When is parol evidence also admissible?

Answer 13

To show: (always will come in, these are all exceptions to parol evidence rule)
-Fraud
-Mistake
-Duress
-Condition precedent (condition that must be met before the contract can be performed)
-Course of dealing
-Trade custom (how we usually buy and sell)

(i.e. this is the way we always deliver the tomatoes)