Contracts II - Parol Evidence Rule - Hall

Contracts II - Parol Evidence Rule - Hall - 1 PAROL...

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PAROL EVIDENCE RULE AND INTERPRETATION – Chapter 5 Spring 2008 – T. Hall – Chad Propst – EXAM OUTLINE I. EXAM BUZZ WORDS FOR PAROL EVIDENCE RULE -- Maxims of interpretation : A. Primary purpose rule – Rest.2d § 202(1) -- If the primary purpose of the parties in making the K can be ascertained, that purpose is given “great weight.” B. All terms made reasonable, lawful and effective – Rest.2d § 206 -- All terms will be interpreted, where possible, so that they will have a reasonable, lawful and effective meaning . C. Construction against the draftsman – Rest.2d § 206 – (Hall big in insurance business) An ambiguous term will be construed against the drafter . D. Negotiated terms control standard terms – Rest.2d § 203(d) -- A term that has been negotiated between the parties will control over a standardized portion of the agreement (i.e., the fine print “boilerplate”) that is not separately negotiated. 1. Typewritten or handwritten words – This will usually mean that the clause that has been typewritten in as a “rider” to a pre-printed form K, or a clause that has been handwritten onto a typewritten agreement, will have priority in case of a conflict. Rest.2d. -- § 213 Effect of Integrated Agreement on Prior Agreements (Parol Evidence Rule) (1) A binding [“partially”] integrated agreement discharges prior agreements to the extent that it is inconsistent with them. (2) A binding completely integrated agreement discharges prior agreements to the extent that they are within its scope . (3) An integrated agreement that is not binding or that is voidable and avoided does not discharge a prior agreement. But an integrated agreement, even though not binding, may be effective to render inoperative a term which would have been part of the agreement if it had not been integrated. II. PAROL EVIDENCE RULE – CLASS NOTES A. Are we going to be allowed to prove that an agreement was made? B. Hall Think of it as the “PRIOR NEGOTIATIONS RULE” C. PER – all prior negotiations are discharged by the final K that parties enter into. D. EXAM fact pattern Look to two things set up a PER problem 1. The formal K of the parties PRECEDED by an informal promise made preceding the writing E. Hall Two Steps 1. Look at the final K -- a. Is it partially integrated? b. Is it fully (completely) integrated? I. Is this the final and complete expression of the parties’ agreement? II. If it’s a complete record, no parol evidence is allowed. 2. Look at the informal agreement or promise – a. What IS the K? b. If answer to Part I was partial integration, was the informal agreement inconsistent with the 1
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writing? c. If answer to Part I was total integration, was the informal agreement within the scope with the writing? 3.
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Contracts II - Parol Evidence Rule - Hall - 1 PAROL...

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