A buyer and a seller enter into a written contract for the sale of a commercial property. The contract includes a clause stating, 'This written agreement constitutes the entire agreement between the parties and supersedes all prior discussions, negotiations, and agreements.' Prior to signing, the seller orally promised the buyer that a specific, valuable antique chandelier would be included in the sale, even though it is not mentioned in the written contract. After closing, the buyer demands the chandelier, but the seller refuses. If the buyer sues, what is the most likely outcome regarding the chandelier?
- AThe buyer will not receive the chandelier because the parol evidence rule, combined with the integration clause, bars evidence of the prior oral agreement.
- BThe buyer will receive the chandelier because the parol evidence rule only applies to contradictions, and including a chandelier is supplemental, not contradictory.
- CThe buyer will receive the chandelier because the oral promise was made and relied upon before the contract was signed.
- DThe contract is voidable due to fraud in the inducement if the seller never intended to include the chandelier.
Show answer & explanationAnswer & explanation
Correct answer: A. The buyer will not receive the chandelier because the parol evidence rule, combined with the integration clause, bars evidence of the prior oral agreement.
The parol evidence rule, especially when coupled with a 'merger' or 'integration' clause, prevents the introduction of evidence of prior or contemporaneous oral agreements that contradict or add to the terms of a fully integrated written contract. The oral promise about the chandelier would be barred.
Why the other options are wrong
- B. While some courts allow supplemental terms for partially integrated contracts, a full integration clause generally bars all prior agreements not in the writing, even non-contradictory ones.
- C. Reliance on a prior oral promise is generally barred if the contract is fully integrated and the promise is not an exception to the parol evidence rule.
- D. Fraud in the inducement is an exception to the parol evidence rule, but the scenario does not explicitly state the seller's intent to defraud, only that the promise was made and not included in the final writing.
Parol Evidence Rule (Full Integration)
A common law rule that prevents the introduction of evidence of prior or contemporaneous oral agreements, or prior written agreements, that contradict or vary the terms of a written contract that the parties intend to be the complete and final expression of their agreement (a 'fully integrated' contract).
- Applies to fully integrated contracts, often indicated by a 'merger' or 'integration' clause.
- Bars evidence of prior/contemporaneous oral agreements.
- Does not bar evidence to explain ambiguity, prove fraud, or show conditions precedent.
Memory trick: Written Word is King, Oral Deals are Silent.