Restat 2d of Contracts, § 209

• Restatement of the Law, Second, Contracts
• Chapter 9- The Scope of Contractual Obligations
• Topic 3- Effect of Adoption of a Writing
• § 209 Integrated Agreements

(1)  An integrated agreement is a writing or writings constituting a final expression of one or more terms of an agreement.
(2)  Whether there is an integrated agreement is to be determined by the court as a question preliminary to determination of a question of interpretation or to application of the parol evidence rule.
(3)  Where the parties reduce an agreement to a writing which in view of its completeness and specificity reasonably appears to be a complete agreement, it is taken to be an integrated agreement unless it is established by other evidence that the writing did not constitute a final expression.

Comment:

a.  Significance of integration.  Where the parties to an agreement have reduced a term of the agreement to specific words or other symbols, interpretation of that term relates to the meaning of the words and symbols used. See § 212. An integrated agreement supersedes contrary prior statements, and a completely integrated agreement supersedes even consistent additional terms. See §§ 213-16. But both integrated and unintegrated agreements are to be read in the light of the circumstances and may be explained or supplemented by operative usages of trade, by the course of dealing between the parties, and by the course of performance of the agreement.

b.  Form of integrated agreement.  No particular form is required for an integrated agreement. Written contracts, signed by both parties, may include an explicit declaration that there are no other agreements between the parties, but such a declaration may not be conclusive. The intention of the parties may also be manifested without explicit statement and without signature. A letter, telegram or other informal document written by one party may be orally assented to by the other as a final expression of some or all of the terms of their agreement. Indeed, the parties to an oral agreement may choose their words with such explicit precision and completeness that the same legal consequences follow as where there is a completely integrated agreement.

Illustrations:

1. A and B enter into an oral contract, and prepare and sign a writing to incorporate its terms. Though the writing contains substantially all the orally agreed terms, they are not fully satisfied with it, and they agree to have it redrafted. There is no integrated agreement.

2. A orally agrees to employ B on certain terms. B immediately writes and A receives a letter beginning, "Confirming our oral arrangement this morning," and fully stating the contract as he understands it. A makes no reply but with knowledge of B's understanding accepts services from B under the contract. The letter is a completely integrated agreement. Even though the letter is not in all respects accurate, it operates as an offer of substituted terms, and A's acquiescence manifests assent to those terms.

c.  Proof of integration.  Whether a writing has been adopted as an integrated agreement is a question of fact to be determined in accordance with all relevant evidence. The issue is distinct from the issues whether an agreement was made and whether the document is genuine, and also from the issue whether it was intended as a complete and exclusive statement of the agreement. See § 210; compare Uniform Commercial Code § 2-202. Ordinarily the issue whether there is an integrated agreement is determined by the trial judge in the first instance as a question preliminary to an interpretative ruling or to the application of the parol evidence rule. See §§ 212, 213. After the preliminary determination, such questions as whether the agreement was in fact made may remain to be decided by the trier of fact. Subsection (3) states the rule that a written agreement complete on its face is taken to be an integrated agreement in the absence of contrary evidence.

Illustration:

3. A sells and delivers a hotel to B. Later A takes possession of the hotel furniture, and B sues to recover it. B claims the furniture under an oral agreement; A proves an apparently complete written agreement for the sale of the real property, and objects to consideration of the oral agreement. In the absence of contrary evidence, the writing is taken to be an integration; whether it is a complete integration is decided on the basis of all relevant evidence. If the oral agreement contradicts the writing, or if the writing is a complete integration, evidence of the oral agreement is excluded; otherwise the trier of fact is to decide whether the oral agreement was made.

Former §§ 228 and 229 are rewritten as §§ 209 and 210 to follow the terminology of Uniform Commercial Code § 2-202. See 4 Williston, Contracts §§ 604-07, 633-38 (3d ed. 1961); 3 Corbin, Contracts §§ 539, 581-88 (1960 & Supp. 1980); 9 Wigmore, Evidence §§ 2425-31 (3d ed. 1940).

Comment b.  That a declaration in the contract that it is integrated is not conclusive, but is only a factor to be considered, see Pasquale Food Co. v. L & H Int'l Airmotive, Inc., 51 Ala. App. 127, 283 So.2d 438 (1973), cert. denied, 291 Ala. 795, 283 So.2d 448 (1973). Illustrations 1 and 2 are based on Illustrations 1 and 2 to former § 228. Compare Diversified Environments, Inc. v. Olivetti Corp., 461 F. Supp. 286 (M.D. Pa. 1978).

Comment c.  That all relevant evidence, including evidence extrinsic to the document in question, is admissible on the issue whether the parties intended the document to be integrated, see Burroughs Corp. v. Weston Int'l Corp., 577 F.2d 137 (4th Cir. 1978); David Nassif Assoc. v. United States, 214 Ct. Cl. 407, 557 F.2d 249 (1977) (note agreement of both majority and dissent on this point); Friestad v. Travelers Indem. Co., 260 Pa. Super. Ct. 178, 393 A.2d 1212 (1978); Don L. Cooney, Inc. v. Star Iron & Steel Co., 12 Wash. App. 120, 528 P.2d 487 (1974); Murray, Contracts § 105 (Rev. ed. 1974). See also Note, Chief Justice Traynor and the Parol Evidence Rule, 22 Stan. L. Rev. 547 (1970); McCormick, The Parol Evidence Rule as a Procedural Device for Control of the Jury, 41 Yale L.J. 365 (1932). Illustration 3 is based on Brown v. Oliver, 123 Kan. 711, 256 P. 1008 (1927).

ALR Annotations:

Effect of stipulation, in private building or construction contract, that alterations or extras must be ordered in writing. 2 A.L.R.3d 620.
Effect of stipulation, in public building or construction contract, that alterations or extras must be ordered in writing. 1 A.L.R.3d 1173.

Digest System Key Numbers:

Contracts 164