Does our entire-agreement clause keep the other side's pre-contract representations out of a Rhode Island case?
Not by itself: the clause is evidence of integration, not proof of it, and a general one does not bar a fraud claim at all. Rhode Island's starting point is orthodox: "the parol evidence rule bars the admission of any previous or contemporaneous oral statements that attempt to modify an integrated written agreement", and "[i]n situations in which the language of a contractual agreement is plain and unambiguous, its meaning should be determined without reference to extrinsic facts" or aids (Fleet National Bank v. 175 Post Road, LLC). Whether the words are plain is for the judge: "[t]he determination of whether a contract's terms are ambiguous is a question of law to be decided by the court" (Chariho Regional School District v. State). But the rule only bites once the writing is INTEGRATED, and Golden Gate Corp. v. Barrington College holds that the document cannot establish that about itself, and the definition it used is the Restatement's: "An integrated document is one 'where the parties thereto' adopt a writing or writings as the final and complete expression of the agreement.' ... That question cannot be answered by an examination of the instrument alone for the writing does not in or of itself prove completeness." Instead "in each instance wide latitude must be allowed for inquiry as to whether the parties intended that the writing constitute an integration of all of their prior agreements and negotiations", the trial justice takes that evidence preliminarily and out of the jury's hearing, and "must then determine whether the collateral terms are consistent with the written and are such as would normally be excluded from the written contract by the parties." On fraud the line is drawn by SPECIFICITY. In Travers v. Spidell the clause read "We, the parties hereto, each declare that this instrument contains the entire agreement between the parties, and that it is subject to no understandings, conditions or representations other than those expressly stated therein", textbook entire-agreement boilerplate, and the Court held that "the general merger and disclaimer language used in this P & S does not, as a matter of law, bar the fraud claim against the Spidells." What did work, in LaFazia v. Howe, was a clause under which the buyer relied "on their own judgment as to the past, present or prospective volume of business or profits", the very matter said to have been misrepresented: "the merger and disclaimer clauses preclude defendants from asserting that plaintiffs made material misrepresentations regarding the profitability of the business."
The trap
The trap is the word "general", twice over. (1) On fraud: LaFazia is often read as Rhode Island enforcing merger clauses against fraud, and the opinion says the opposite about the ordinary form: "The provision in the instant case differs considerably from the one quoted above in that it is not a general but a specific disclaimer", and "[i]f the clause in the case before us had been as general and had not provided that the buyer was to rely solely on his own judgment regarding the past, present, or prospective volume of the business, the" ruling below "would have been inappropriate." Six years later Travers applied exactly that reservation to a standard "entire agreement" clause and let the fraud claim proceed. LaFazia also conditions the specific disclaimer twice: it works only "if it was read and understood by the party now claiming fraud and the provision itself was not procured by fraud." (2) On integration: a Rhode Island judge may take extrinsic evidence BEFORE deciding whether your writing is complete, so the merger clause does not shut the inquiry down. It is one piece of the evidence about intent. Golden Gate lets a consistent collateral term in that the parties "would normally" have left out of the writing, and excludes it only when it is inconsistent or is one "the parties would naturally and normally have included" in the writing. Note finally what this rule does NOT say: the sale-of-goods parol-evidence section, R.I. Gen. Laws § 6A-2-202, is absent from the Rhode Island statutes we publish, and the only Rhode Island opinion that states its rule is Golden Gate itself, in 1964, describing § 6A-2-202(b) as it then stood. One later opinion names the section without stating it, describing it as a statutory parol evidence rule for sales while holding that the Code states no general parol evidence rule for commercial paper.
19 authorities
The words that state the rule
An integrated document is one “where the parties thereto' adopt a writing or writings as the final and complete expression of the agreement.” 1 Restatement, Contracts §228, p. 307.
The words that state the rule
That question cannot be answered by an examination of the instrument alone for the writing does not in or of itself prove completeness.
The words that state the rule
Instead in each instance wide latitude must be allowed for inquiry as to whether the parties intended that the writing constitute an integration of all of their prior agreements and negotiations.
The words that state the rule
the trial justice must then determine whether the collateral terms are consistent with the written and are such as would normally be excluded from the written contract by the parties.
The words that state the rule
pursuant to G. L. 1956, §6A-2-202(b), parol or extrinsic evidence of consistent prior agreements is admissible in supplementation or explanation of such instruments unless there has been a preliminary finding by the trial justice that the writing was intended by both -parties as a complete and exclusive statement of all the terms
The words that state the rule
In addition, the parol evidence rule bars the admission of any previous or contemporaneous oral statements that attempt to modify an integrated written agreement.
The words that state the rule
We previously have held “[i]n situations in which the language of a contractual agreement is plain and unambiguous, its meaning should be determined without reference to extrinsic facts
The words that state the rule
As is well settled by our long-standing principles of contract interpretation, “[t]he determination of whether a contract’s terms are ambiguous is a question of law to be decided by the court.”
The words that state the rule
“We, the parties hereto, each declare that this instrument contains the entire agreement between the parties, and that it is subject to no understandings, conditions or representations other than those expressly stated therein.”
The words that state the rule
For the same reason the general merger and disclaimer language used in this P & S does not, as a matter of law, bar the fraud claim against the Spidells.
The words that state the rule
We find that there was no issue of material fact in the instant case and that summary judgment was appropriate because the merger and disclaimer clauses preclude defendants from asserting that plaintiffs made material misrepresentations regarding the profitability of the business.
The words that state the rule
The provision in the instant case differs considerably from the one quoted above in that it is not a general but a specific disclaimer. Such a provision, in our view, shall not vitiate the contract if it was read and understood by the party now claiming fraud and the provision itself was not procured by fraud.
The words that state the rule
The Buyers rely on their own judgment as to the past, present or prospective volume of business or profits of the business of the Seller and does not rely on any representations of the Seller with respect to the same.
The words that state the rule
If the clause in the case before us had been as general and had not provided that the buyer was to rely solely on his own judgment regarding the past, present, or prospective volume of the business, the *186 trial justice’s ruling would have been inappropriate.
- case199 A.2d 586Golden Gate Corporation v. Barrington CollegeR.I.decided 1964read it at the source ↗
The words that state the rule
If on the other hand, what is collateral is inconsistent with the writing or is such that the parties would naturally and normally have included one in the other, then the extrinsic evidence originally admitted preliminarily must be excluded and may not be considered by the trier of facts.
The words that state the rule
The complainant’s appeal is sustained, the decree appealed from is reversed, and the cause is remanded to the superior court with direction that the justice who heard the bill of complaint, if available, shall determine, in accordance with this opinion, the ultimate issues raised.
The words that state the rule
Bloomberg held that this general-merger clause did not shield the defendant from fraud liability when the plaintiff alleged that the defendant’s false promise to throw some “trucking business” his way induced him to buy a truck.
The words that state the rule
Accordingly, we sustain the plaintiffs appeal, vacate the decision below granting summary judgment for the defendants, and remand the papers in this case to the Superior Court for further proceedings consistent with our decision.
The words that state the rule
In this case, we need not go beyond the unambiguous terms of the agreements in order to understand them. Conclusion For the foregoing reasons we affirm the judgment of the Superior Court. The record shall be remanded to the Superior Court.
“Defective” means that reading found something to correct. What you are reading is the rule as it stands after that reading.