Another essential step in determining whether a writing is final, or complete and exclusive, is to compare the writing with the parol evidence a party seeks to use.289 The nature of the parol evidence may, in and of itself, be sufficient to demonstrate that it should be admitted.290 As Corbin on Contracts says:
Which party drafted the contract is a significant factor in determining whether parol evidence is admissible. For example, a number of courts have held that the party that drafted the contract cannot introduce parol evidence.293
The parties’ post-sale conduct is also relevant to the issue of intent. Post-sale conduct helps show the parties’ beliefs regarding the nature of the actual agreement. A seller’s act of repairing a product without charge indicates that an express warranty was made, so a writing without such a warranty could not have been intended as final.296
A merger or integration clause creates an additional complexity when analyzing the admissibility of parol evidence. Such a clause states that the writing is the complete and exclusive agreement of the parties. A similar clause reads: “Our sales staff has no authority to make any statements or promises about the goods. Buyer understands and agrees that seller is not bound by any such statements.
There is considerable support for refusing to give effect to an inconspicuous merger clause.
A merger clause in a contract is ineffective if the contract itself is not binding. For example, in one case the contract contained a merger clause but provided that the contract was not binding until it was signed by the seller. The court held that this contractual language had to be construed strictly against the seller, who had drafted it. The court concluded that the contract was not binding and the merger clause therefore had no effect.315
The merger clause limits oral statements in determining the meaning of an agreement between two parties. A merger clause thus cannot prevent oral statements from being used to determine the nature of a consumer’s separate agreement with a third party.318 This principle is most often relevant to warranty claims against manufacturers.
Typically the court as a matter of law determines whether the parties intended the writing as a final (or as a complete and exclusive) statement of their agreement.321 The court rules on the proffered parol evidence before the evidence can be heard by the trier of fact.
Unless the parties intended the contract to be not only final, but also a complete and exclusive statement of the terms of the agreement, parol evidence is admissible to supplement the writing by establishing additional terms that are consistent with the written terms.326 If the written terms and the parol evidence can be construed harmoniously, the parol evidence is admissible.
Courts often find disclaimers not to be inconsistent with oral promises. Disfavored by the law, disclaimers are to be construed narrowly.340 In Killion v. Buran Equipment Co.,341 for example, a used truck buyer was allowed to show that a seller had orally represented that the diesel engine was original equipment and had been given a major overhaul, despite a written disclaimer of express warranties.
An important exception to the parol evidence rule allows evidence of usage of trade, the parties’ course of dealing, or their course of performance to be introduced to explain or supplement the writing.345 This evidence is always admissible, even if the court finds that the parties intended the writing not only as final but also as complete and exclusive.346 It is admissible regardless of whether the contract is ambiguous.347 It can be introd
Article 1 of the UCC defines “course of dealing” as “a sequence of conduct concerning previous transactions between the parties to a particular transaction that is fairly to be regarded as establishing a common basis of understanding for interpreting their expressions and other conduct.”352
UCC Article 1 defines “course of performance” as “a sequence of conduct between the parties to a particular transaction that exists if: (1) the agreement of the parties with respect to the transaction involves repeated occasions for performance by a party; and (2) the other party, with knowledge of the nature of the performance and opportunity for objection to it, accepts the performance or acquiesces in it without objection.”359
“Usage of trade” is “any practice or method of dealing having such regularity of observance in a place, vocation, or trade as to justify an expectation that it will be observed with respect to the transaction in question.”360 Trade usage can justify a broad reading of a contract description. Comment 5 to section 2-313 states: “Of course, all descriptions by merchants must be read against the applicable trade usages with the general rules as to merchantability resolving any doubts.”
The UCC parol evidence rule applies only to “any prior agreement” and to “any contemporaneous oral agreement.”364 Thus, by its own terms, it does not apply to oral or written statements made after the writing was made.365 Evidence of seller statements or conduct occurring after the writing was made may be admitted either to show additional terms of the agreement or to explain existing terms.366 Such statements or conduct may be admitted even
The admissibility of evidence of warranties arising from advertising and promotional materials can be justified as part of the parties’ course of dealing or course of performance, both of which are always admissible to explain or supplement a writing.370 This evidence may also form part of the trade usages “that furnish the background and give particular meaning to the language used, and are the framework of common understanding” by the parties.371 These representations may also be among the
Even though a showing of ambiguity is not required under the Code before parol evidence will be admitted, a showing that a contract term is ambiguous or needs interpretation makes it difficult or impossible for a court to exclude parol evidence.
Another line of cases creates an exception to the parol evidence rule for evidence of conditions precedent to the contract, fundamental assumptions underlying the contract, and inducements to the contract.390 Even the most complete written contract does not state all the terms, understandings, and assumptions of the parties’ agreement. For example, few modern contracts provide that the buyer’s payment must be in legal tender, yet any other form of monetary payment by the buyer would be a breach of contract.
Regardless of whether parol evidence is admissible to supplement, explain, or contradict a contract, it is admissible in support of other claims such as fraud,396 mistake,397 and deceptive practices.398 Even the traditional version of the parol evidence rule, as expressed by the Restatement (Second) of Contracts section 214, recognizes that agreements and negotiations prior to or contemporaneous with the adoption of a writing are adm
One of the reasons that express warranties are so important in consumer transactions is that, unlike implied warranties, they cannot be disclaimed. Comment 1 to UCC § 2-313 states: “ ‘Express’ warranties rest on ‘dickered’ aspects of the individual bargain, and go so clearly to the essence of that bargain that words of disclaimer in a form are repugnant to the basic dickered terms.” Accordingly, “as is” clauses and other disclaimers, no matter how conspicuous and clearly worded, have no effect on express warranties.
Except in mail order, internet, or catalog sale transactions, buyers usually have an opportunity to inspect either the goods, a model, or a sample before the sale is consummated. A mere opportunity to inspect has no effect on the existence or scope of any of the UCC warranties.401 Furthermore, as section 2-316(3)(b) refers only to the effect of inspection on implied warranties, it is reasonable to argue that express warranties are unaffected by inspection.402
Frequently, the buyer will receive more than one express or implied warranty in a transaction. Furthermore, the buyer may receive warranty protection from both the retailer and the manufacturer.
Although the Code does not define consistent, the sixth edition of Black’s Law Dictionary defines it as “harmonious; congruous; compatible; compliable; not contradictory.”422 Contradictory is defined in Webster’s Dictionary as “a proposition so related to another that if either of the two is true the other is false and if either is false the other must be true.”423 Under these definitions, warranties are consistent unless a product cannot comply with both
If it is unreasonable to construe warranties as consistent with each other and as cumulative, section 2-317 provides that “the intention of the parties shall determine which warranty is dominant.” To determine that intention, the section sets out general rules: the implied warranty of fitness for a particular purpose prevails over an inconsistent express warranty;433 an express warranty prevails over an inconsistent implied warranty of merchantability;434 and when express warranties conflict
This chapter focuses on used car warranty issues. Other chapters cover topics relevant to used car warranties, and that discussion will not be repeated here. This chapter examines warranty issues of special relevance to used cars and details laws applicable only to used car sales.