Does our merger clause keep the other side's prior promises out of the case?
It is aimed at exactly that. In Osterhaus v. Schunk the Supreme Court described what such a clause does: "An integration clause protects both the seller and the broker from the buyer's argument that the seller made oral representations upon which the buyer relied." For a writing within UCC article 2, K.S.A. 84-2-202 supplies the statutory rule: terms set forth in a writing intended by the parties as a final expression of their agreement may not be contradicted by evidence of any prior agreement or of a contemporaneous oral agreement, but may be explained or supplemented by course of performance, course of dealing or usage of trade, and supplemented by evidence of consistent additional terms unless the court finds the writing was intended also as a complete and exclusive statement of the terms.
The trap
An integration clause is not a fraud release. Nor is it a reliance release in the hands of everyone who signs nearby: in Stechschulte v. Jennings the Supreme Court recorded that "Osterhaus rejected this blanket waiver-of-reliance argument as to all of the defendants in that case, which included the agent and his brokerage", and said "We therefore do likewise here." Osterhaus held that a buyer's signed acknowledgment in a residential real-estate contract "does not relieve a seller of the obligation to make accurate and complete disclosures and does not bar Osterhaus' contract claims as a matter of law", so the acknowledgment did not convert the seller's disclosure obligation into a defence: the decision of the Court of Appeals was affirmed, the district court was reversed, and the claims went back for further proceedings. The UCC rule is also narrower than a merger clause sounds: K.S.A. 84-2-202 blocks contradiction by prior or contemporaneous agreements only, leaves course of performance, course of dealing and usage of trade admissible to explain or supplement, and shuts out consistent additional terms only if the court finds the writing was intended as a complete and exclusive statement.
7 authorities
The words that state the rule
An integration clause protects both the seller and the broker from the buyer's argument that the seller made oral representations upon which the buyer relied.
The words that state the rule
Accordingly, we hold that paragraph 5 of the buyer's acknowledgment does not relieve a seller of the obligation to make accurate and complete disclosures and does not bar Osterhaus' contract claims as a matter of law.
- statuteK.S.A. 84-2-202enactment date not established
The words that state the rule
Terms with respect to which the confirmatory memoranda of the parties agree or which are otherwise set forth in a writing intended by the parties as a final expression of their agreement with respect to such terms as are included therein may not be contradicted by evidence of any prior agreement or of a contemporaneous oral agreement but may be explained or supplemented:
- statuteK.S.A. 84-2-202enactment date not established
The words that state the rule
(b) by evidence of consistent additional terms unless the court finds the writing to have been intended also as a complete and exclusive statement of the terms of the agreement.
- statuteK.S.A. 84-2-202enactment date not established
The words that state the rule
(a) By course of performance, course of dealing or usage of trade (K.S.A. 2025 Supp. 84-1-303, and amendments thereto); and
The words that state the rule
On reliance, like Jennings, Golson and PHB seek shelter under Paragraph 5 of the Buyer Acknowledgement. Osterhaus rejected this blanket waiver-of-reliance argument as to all of the defendants in that case, which included the agent and his brokerage. 291 Kan. at 785 . We therefore do likewise here.
The words that state the rule
The decision of the Court of Appeals is affirmed. The decision of the district court *911 is reversed and remanded to the district court for further proceedings.
“Defective” means that reading found something to correct. What you are reading is the rule as it stands after that reading.