Holding: The court of appeal affirmed the trial's court's ruling, where it rejected all of ABC's arguments
Question:
Holding: The court of appeal affirmed the trial's court's ruling, where it
rejected all of ABC's arguments and granted Jones' motion in limine
excluding evidence of the indemnity agreement in Agreement 1. As a
result, the trial court entered judgment for Jones.
Analysis: the parol evidence rule prohibits the introduction of extrinsic
evidence to vary or contradict the terms of an integrated document. When
the parties intend a written agreement to be the final and complete
expression of their understanding, that writing becomes the final contract
between the parties, which may not be contradicted by even the most
persuasive evidence of collateral agreements.
Contrary to ABC's argument, the appellate court reasoned the indemnity
provision in Agreement 1 addressed the same subject as Agreement 2
(e.g., the sale of the property.) And, the indemnity provision (which ABC
wanted to introduce) varied the extent of Jones' obligation with respect to
the sale under the terms of Agreement 2. Accordingly, the appellate court
held the indemnity provision in Agreement 1 was encompassed within the
integration clause of Agreement 2.
The issue of whether an agreement is integrated is often where the battle is
won or lost because if the court determines the contract is integrated,
extrinsic evidence is not admissible to contradict its terms. Best practice,
therefore, are to both determine the opposing side's view on the integration
of the contract and to exclude evidence which contradicts the plain terms of
the written contract. Also, discovery should include requests for the
opposing side to admit that the contract is unambiguous and fully
integrated with follow up interrogatories to explain denials of such requests.
Why did the court come to this conclusion?