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parties’ writings agree and (2) terms in a writing that the parties intended to be the final expression of their agreement as to any terms in the writing. An agreement is fully integrated if the parties intended the writing to be the final, complete, and exclusive statement of their agreement’s terms. Integrated terms cannot be contradicted by extrinsic evidence of (1) any prior agreement, written or oral, or (2) any contemporaneous oral agreement. Integrated terms may be supplemented or explained, though, by evidence of course of performance; course of dealing; usage of trade; or, unless the agreement is fully integrated, evidence of consistent additional terms. Yet even in a fully integrated agreement, virtually any type of relevant extrinsic evidence is admissible to explain or supplement an ambiguous term. 1. Merger Clause as a Factor in Determining Whether an Agreement Is Fully Integrated A merger clause states that the writing embodies the final, complete, and exclusive expression of the parties’ agreement. A merger clause is not technically controlling. But courts will usually honor a merger clause, especially one separately entered into the agreement and not just part of a preprinted form.
2. Things the Parol-Evidence Rule Does Not Bar The parol-evidence rule does not bar evidence to:
interpret an ambiguous term; determine whether the agreement is fully or partially integrated; determine whether there is a valid, enforceable contract; show the transaction’s true nature; show a modification to the agreement; establish or disprove a defense to enforcement; prove fraud or mistake; prove that the contract does not reflect the parties’ intent; or show evidence of collateral undertakings.
Contract Modification under Article 2 Generally
In Article 2, a good-faith contract modification requires no consideration to be binding.
Delegation and Assignment
Under Article 2, the parties may delegate their contractual duties or assign their contractual rights.
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