Does our integration/entire-agreement clause keep out evidence of prior or side agreements in Alaska?
For a sale of goods, AS 45.02.202 bars contradicting a final written expression with evidence of a prior or contemporaneous oral agreement, though the writing "may be explained or supplemented" by course of dealing, course of performance, or trade usage, and (unless the writing was also intended as complete and exclusive), by evidence of consistent additional terms. For contracts generally, Philbin v. Matanuska-Susitna Borough states Alaska's common-law parol evidence rule directly: "The parol evidence rule states that an integrated written contract may not be varied or contradicted by prior negotiations or agreements." Applying it requires the court to work through three questions in order: "(1) whether the contract is integrated, (2) what the contract means, and (3) whether the prior agreement conflicts with the integrated agreement."
The trap
The rule does not apply at all in two situations that have nothing to do with how the integration clause is worded: Philbin holds "[t]he parol evidence rule does not apply 'where a contract has been formed as a result of misrepresentation or mutual mistake'": there, the court admitted evidence of what the parties were told before signing, not to contradict the release's terms, but to show the parties never had a shared understanding of what it covered (mutual mistake). The court put the distinction in terms a drafter can use: the evidence "was to show that the parties did not intend that the November 15 release had the meaning the borough ascribed to it, not to vary or contradict the terms of the written contract," and so was "a permissible use of extrinsic evidence to prove mutual mistake." And step (1) of the test is not automatic just because a document looks final: Philbin itself held a signed release was NOT an integrated agreement at all, noting the release "contains' no" integration clause (the published text carries that stray apostrophe) and there was no evidence it memorialized a previously reached agreement: the ABSENCE of an integration clause was itself evidence against integration, meaning a boilerplate "entire agreement" clause is doing real work in this analysis, not merely restating a default. Note what that bought the party resisting the release: the court did not construe it, it reversed, "[b]ecause there are genuine issues of material fact as to the parties' understanding of the release."
9 authorities
- statuteAS 45.02.202enactment date not established
The words that state the rule
Terms with respect to which the confirmatory memoranda of the parties agree, or that are otherwise set out in a writing intended by the parties as a final expression of their agreement with respect to the terms included in the writing, may not be contradicted by evidence of a prior agreement or of a contemporaneous oral agreement, but may be explained or supplemented (1) by course of performance, course of dealing, or usage of trade ( AS 45.01.303 ); and (2) by evidence of consistent additional terms unless the court finds the writing was intended also as a complete and exclusive statement of the terms of the agreement.
The words that state the rule
The parol evidence rule states that an integrated written contract may not be varied or contradicted by prior negotiations or agreements.
The words that state the rule
Before the rule can be applied, three things must be determined: (1) whether the contract is integrated, (2) what the contract means, and (3) whether the prior agreement conflicts with the integrated agreement.
The words that state the rule
The parol evidence rule does not apply “where a contract has been formed as a result of misrepresentation or mutual mistake.”
The words that state the rule
We agree with Philbin’s argument that the release is not an integrated agreement.
The words that state the rule
There is no evidence that the release memorialized terms of an agreement between Philbin and the borough; it appears simply to have been a standard form presented to Philbin when he went to pick up his check. The release contains' no integration clause. The borough has not disputed that it owed Philbin the payment he received upon signing the release. That circumstance is inconsistent with reading the release as having memorialized a previously reached agreement to waive all past, present, and future claims.
The words that state the rule
This was a permissible use of extrinsic evidence to prove mutual mistake.
The words that state the rule
Philbin’s purpose in offering evidence about what he was told by borough representatives on November 2, 3 or 8 was to show that the parties did not intend that the November 15 release had the meaning the borough ascribed to it, not to vary or contradict the terms of the written contract.
The words that state the rule
Because there are genuine issues of material fact as to the parties’ understanding of the release, we REVERSE and REMAND for further proceedings.
“Defective” means that reading found something to correct. What you are reading is the rule as it stands after that reading.