Does a merger clause shut out prior negotiations and side promises in Connecticut?
For unambiguous terms, yes: the Connecticut Supreme Court continues to adhere to the general principle that the unambiguous terms of a written contract containing a merger clause may not be varied or contradicted by extrinsic evidence, provided the writing is integrated, that is, intended by the parties to contain the whole agreement and to be a final expression of one or more terms of the agreement (Tallmadge Bros. v. Iroquois Gas). The court recognizes exceptions, in a footnote, under which, in words it quotes from TIE Communications, Inc. v. Kopp, 'extrinsic evidence may be admissible': to explain an ambiguity appearing in the instrument; to prove a collateral oral agreement which does not vary the terms of the writing; to add a missing term in a writing which indicates on its face that it does not set forth the complete agreement; or to show mistake or fraud.
The trap
Two things decide whether the clause works. The bar applies only if the writing is integrated, and in Tallmadge, where the parties had relatively equal bargaining power and signed only after a lengthy drafting process with the advice of counsel, the court held the insertion of the merger clauses 'conclusive evidence of their intent to create fully integrated contracts'; it observed that disagreement over the weight of a merger clause has mostly arisen with unequal bargaining power, fraud, duress or contracts contrary to public policy, none of which was present. And 'A merger clause, of course, will not operate as a bar to the introduction of evidence of fraud by one of the contracting parties.' In Tallmadge the trial court's reliance on extrinsic evidence (the parties' conduct during negotiations and afterwards) to determine intent could not be reconciled with the merger clause, and the judgment was reversed.
10 authorities
- case252 Conn. 479Tallmadge Bros., Inc. v. Iroquois Gas Transmission System, L.P.Conn.decided 2000read it at the source ↗
The words that state the rule
Although there are exceptions to this rule, 14 we continue to adhere to the general principle that the unambiguous terms of a written contract containing a merger clause may not be varied or contradicted by extrinsic evidence.
- case252 Conn. 479Tallmadge Bros., Inc. v. Iroquois Gas Transmission System, L.P.Conn.decided 2000read it at the source ↗
The words that state the rule
In order for the bar against the introduction of extrinsic evidence to apply, the writing at issue must be integrated, that is, it must have been intended by the parties “to contain the whole agreement”; Associated Catalog Merchandisers, Inc. v. Chagnon, 210 Conn. 734, 740 , 557 A.2d 525 (1989); and to be “a final expression of one or more terms of [the] agreement . . . .” (Citation omitted; internal quotation marks omitted.) Id.
- case252 Conn. 479Tallmadge Bros., Inc. v. Iroquois Gas Transmission System, L.P.Conn.decided 2000read it at the source ↗
The words that state the rule
For example, extrinsic evidence may be admissible: “(1) to explain an ambiguity appearing in the instrument; (2) to prove a collateral oral agreement which does not vary the terms of the writing; (3) to add a missing term in [a] writing which indicates on its face that it does not set forth the complete agreement; or (4) to show mistake or fraud.” (Internal quotation marks omitted.) TIE Communications, Inc. v. Kopp, supra, 218 Conn. 288 -89.
- case252 Conn. 479Tallmadge Bros., Inc. v. Iroquois Gas Transmission System, L.P.Conn.decided 2000read it at the source ↗
The words that state the rule
We conclude, therefore, that the parties’ insertion of the merger clauses into the settlement agreements is *505 conclusive evidence of their intent to create fully integrated contracts, and that the trial court’s subsequent consideration of extrinsic evidence was improper.
- case252 Conn. 479Tallmadge Bros., Inc. v. Iroquois Gas Transmission System, L.P.Conn.decided 2000read it at the source ↗
The words that state the rule
A merger clause, of course, will not operate as a bar to the introduction of evidence of fraud by one of the contracting parties.
- case252 Conn. 479Tallmadge Bros., Inc. v. Iroquois Gas Transmission System, L.P.Conn.decided 2000read it at the source ↗
The words that state the rule
As discussed previously, the parties here possessed relatively equal bargaining power, and they executed the settlement agreements only after a lengthy drafting process during which they had received the advice of counsel.
- case252 Conn. 479Tallmadge Bros., Inc. v. Iroquois Gas Transmission System, L.P.Conn.decided 2000read it at the source ↗
The words that state the rule
Although the question of what weight should be given to a merger clause has prompted a number of differing views, 15 much of this disagreement has occurred in the context of unequal bargaining power between the parties, fraud, duress, or contracts in contravention of public policy.
- case252 Conn. 479Tallmadge Bros., Inc. v. Iroquois Gas Transmission System, L.P.Conn.decided 2000read it at the source ↗
The words that state the rule
Despite the definite and unambiguous language of the settlement agreements, the trial court concluded, and the plaintiffs now argue, that certain extrinsic evidence, specifically the conduct of the parties during the negotiation process and subsequent to the defendant’s dragging of the smoothing beam, supports their contention that the general release language in the agreements does not apply to direct construction damage outside of the work area. The trial court’s reliance on such extrinsic evidence to determine the parties’ intent cannot be reconciled with the merger clause contained in the contracts and, therefore, cannot be squared with our well settled principles of contract law.
- case252 Conn. 479Tallmadge Bros., Inc. v. Iroquois Gas Transmission System, L.P.Conn.decided 2000read it at the source ↗
The words that state the rule
The judgment is reversed and the case is remanded with direction to render judgment for the defendant.
- case252 Conn. 479Tallmadge Bros., Inc. v. Iroquois Gas Transmission System, L.P.Conn.decided 2000read it at the source ↗
The words that state the rule
None of the concerns that might call the merger clauses into question is present in this case.
“Defective” means that reading found something to correct. What you are reading is the rule as it stands after that reading.