Parol Evidence Rule

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Parol Evidence Rule by Mind Map: Parol Evidence Rule

1. Rule: When parties have mutually agreed to incorporate a final version of their entire agreement in a writing: Neither party can contradict or supplement the written agreement with extrinsic evidence (written or oral) of prior agreements or negotiations between them

1.1. Classical approach: “the four corners of the document”, as part of analyzing integration, you are limited to the document itself

1.2. Modern approach: allows you to look beyond the contract itself for other evidence

2. Complete v Partial Integration

2.1. Complete: Final Expression of the agreement

2.1.1. Cannot integrate extrinsic evidence

2.1.2. interpretation evidence is acceptable

2.2. Partial: Some part of the agrement are final expression

2.2.1. Can integrate extrinsic evidence that does not contradict but supplements

2.3. Unintegrated: Not final

2.3.1. Supplemental, contradictory, and interpretory evidence is acceptable

3. Key Evidence:

4. Restatement (Second) 216 An agreement is not completely integrated if the writing omits a consistent additional agreed term which is (a) agreed to for separate consideration, or (b) such a term as in the circumstances might naturally be omitted from the writing.

5. Integration Analysis

5.1. How complete is the document on its face?

5.2. Does it include a merger clause?

5.3. Is there a separate consideration?

5.4. Is there an explanation for why the term might naturally have been omitted?

6. Limitations

6.1. Does not include evidence from after the agreement was made that purportedly modify the previous contract

7. Merger Clause

7.1. Under modern approach, it is not conclusive, will not shut door to other evidence, but hard to overcome

7.2. Every form contract will usually include a merger clause that will state "this is a final contract"