Parol Evidence Rule
Parol Evidence Rule
Governs what type of extrinsic evidence (contract term not reflected in writing) is admissible
If a contract is fully integrated, the court may still bring in extrinsic evidence to show...
fraud, mistake, duress, or undue influence
Coercive equitable relief
Order by a court requiring a party to act or refrain from acting
Quantum Meruit
P can recover value of his services, undiminished by any loss which would have been incurred by complete performance.
Reasonable value of services rendered = the amount it would have cost D to obtain services from another person
3 ways an agreement can be ambiguous on its face
-ambiguous words
-grammatical sloppiness
-conflicting terms
Under the parol evidence rule, the court considers...
how integrated the contract is
(whether a contract is the final and complete expression of an agreement)
Agreements/negotiations prior to the written contract are admissible if...
Section 214(c)
Specific Performance
Requires party to perform the contract
New-business Rule & Case citation
Prevents a business from being awarded damages for lost profits if it has no recent record of profitability
MindGames, Inc. v. Western Publishing Co., Inc.
3 types of ambiguities
-Patent ambiguity: appears on the face of the document
-Latent ambiguity: only revealed after learning additional info
-Ambiguous gap: contract is silent or incomplete regarding raised issue
If a contract is completely integrated... If a contract is not integrated...
extrinsic evidence is barred; extrinsic evidence comes in automatically
Parol Evidence Rule does not apply (therefore evidence is automatically admissible) to:
-evidence of subsequent oral and written terms
-evidence of oral and written terms with separate consideration
-evidence of contemporaneous written term
In order to get coercive equitable relief, the plaintiff must prove...
Inadequacy - remedy of damages is inadequate
P is not owed any damages that D can prove...
P would have incurred even if contract was performed.
Section 349
Unclean Hands Doctrine
No party can obtain affirmative relief in equity with respect to a transaction in which he has himself been guilty of willful conduct that is fraudulent, illegal, or unconscionable.
Misconduct must relate to subject matter of suit or arise out of transaction.
If a contract is partially integrated...
the court only admits extrinsic evidence that is consistent with the terms in writing
2 different approaches courts take in determining whether a contract is integrated
Williston: Asks whether contract appears complete on its face, unless parties naturally would have omitted term
-4 corners rule
-if there is a merger clause, it is completely integrated
Corbin: Parties' intent to create an integrated contract
-all evidence rule
Under the UCC, P is entitled to coercive equitable relief if...
goods are unique or in other proper circumstances
Injured party should not recover more from breach than... & Case citation
he would have gained had contract been fully performed.
Freund v. Washington Square Press, Inc.
Laches
Bars claim if P has delayed claim for an unreasonable amount of time and delay has prejudiced D
Majority and Minority test for whether extrinsic evidence is consistent with the terms in writing
Majority - evidence is consistent with writing if it is "in harmony" with writing
Minority - evidence is consistent with writing if it does not negate any written terms
Contract Interpretation Rules (from most to least preferable)
(1) Course of performance (how parties actually performed)
(2) Course of dealing (how parties performed prior contracts containing term at issue)
(3) Admissions and other significant statements made by parties during negotiation
(4) Trade usage (term's typical use)
(5) Absent the above evidence, courts interpret contracts to make them reasonable and consistent with public policy and in a way that reconciles any seeming inconsistencies
(6) Contra Proferentem (interpreted against person who drafted it, except in non-compete clauses)
Specific performance is appropriate when... & Case citation
(1) contract is valid
(2) P has substantially performed and is willing and able to perform its remaining obligations
(3) D is able to perform its obligations
(4) P has no adequate remedy at law
Travellers Int'l, AG v. Trans World Airlines, Inc.
Recovery for wrongful discharged employee is...
the amount of salary agreed upon minus the amount the employer proves the employee earned or would have earned from other employment, with reasonable effort.
Employment must be substantially similar and not inferior to employment that employee was deprived of.
Elements of Inadequacy
(1) Damages are difficult or impossible to calculate, or
(2) Subject of the contract cannot readily be replaced, or
(3) D is insolvent