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84-2-202. Final written expression: Parol or extrinsic evidence. 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:

(a) By course of performance, course of dealing or usage of trade (K.S.A. 2023 Supp. 84-1-303, and amendments thereto); and

(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.

History: L. 1965, ch. 564, § 26; L. 2007, ch. 89, § 34; July 1, 2008.

KANSAS COMMENT, 1996

1. This section codifies the parol evidence rule as applied to contracts for the sale of goods. The parol evidence rule deals with the admissibility of evidence to establish a term of the contract that does not appear in the writing. If the writing is integrated—i.e., intended by the parties as a final expression of their agreement with respect to the terms in the writing—the terms of the writing cannot be contradicted by evidence of any prior agreement or contemporaneous oral agreement. But the terms of an integrated writing can be added to by evidence of consistent additional terms. Under subsection (b), if the writing is completely integrated—i.e., the parties intended it to be a complete and exclusive expression of their agreement—the writing can be neither contradicted nor supplemented by extrinsic evidence.

2. The decision whether a contract is partially or completely integrated is for the court based on the intent of the parties. There is no presumption that because a writing is integrated it is also completely integrated. See Barbara Oil Co. v. Kansas Gas Supply Corp., 250 K. 438, 827 P.2d 24 (1992) (quoting Kansas Comment 1983 to this section). A "merger" clause is strong evidence that a contract is completely integrated, but it is not conclusive. Official Comment 3 to this section states that a writing is completely integrated—and thus extrinsic evidence is inadmissible—if the additional terms "would certainly have been included" in the document had they been agreed upon.

3. Under subsection (a), a writing can always be supplemented or explained by a course of dealing, usage of trade, or course of performance, regardless of whether the writing is partially or completely integrated. The express terms of the writing and any course of dealing, usage of trade or course of performance must be construed whenever reasonable as consistent with each other, and only when such a construction is unreasonable do the express terms of the contract control. See 84-1-205(4); 84-2-208(2). In addition, extrinsic evidence of all types is admissible to aid the court in interpreting even a fully integrated writing.

4. The traditional common law exceptions to the parol evidence rule continue to apply under the Code. See Jack Richards Aircraft Sales, Inc. v. Vaughn, 203 K. 967, 457 P.2d 691 (1969). Thus, the parol evidence rule does not apply to subsequent oral modifications (see 84-2-209), or to preclude evidence of such defenses as fraud, duress, mistake, lack of consideration, and condition precedent to the effectiveness of the contract.

Law Review and Bar Journal References:

"Beefing Up Product Warranties: A New Dimension In Consumer Protection," Barkley Clark, Michael J. Davis, 23 K.L.R. 567, 586, 592 (1975).

Warranty violations in tripartite finance lease agreements, Winton A. Winter, Jr., 25 K.L.R. 573, 579 (1977).

"Survey of Kansas Law: Contracts," Mary Kathleen Babcock, 27 K.L.R. 215, 218 (1979).

CASE ANNOTATIONS

1. Failure to instruct on disclaimer not reversible error when evidence of oral express warranties inadmissible. Jordan v. Doonan Truck & Equipment, Inc., 220 Kan. 431, 433, 434, 435, 436, 552 P.2d 881.

2. Contention of failure to comply with section; contract unenforceable although wrong statute relied on, summary judgment granted. Mildfelt v. Lair, 221 Kan. 557, 561, 564, 561 P.2d 805.

3. No prior or contemporaneous agreements; contract valid on face. Baker v. Ratzlaff, 1 Kan. App. 2d 285, 288, 564 P.2d 153.

4. Where express terms of contract are ambiguous extrinsic evidence may be considered. Propane Indus., Inc. v. General Motors Corp., 429 F. Supp. 214, 220.

5. Parol evidence rule inapplicable to agent acting for disclosed principal; agent not party to contract. Service Iron Foundry, Inc. v. M.A. Bell Co., 2 Kan. App. 2d 662, 670, 588 P.2d 463.

6. Before admitting parol or extrinsic evidence, trial court required to determine if parties intended some document to be agreement. Transamerica Oil Corp. v. Lynes, Inc., 723 F.2d 758, 763 (1983).

7. Cited; ineffectiveness of prior oral warranty where modification or exclusion of express warranty contained in final written agreement examined. Agristor Leasing v. Meuli, 634 F. Supp. 1208, 1219 (1986).

8. Cited; in sale of industrial paint, alleged breach of express warranties, warranties of fitness for particular purpose examined. Ray Martin Painting, Inc., v. Ameron, Inc., 638 F. Supp. 768 (1986).

9. Gap-filler statutes, under New York law, as unuseable where parol evidence admissible to establish missing terms examined. Rajala v. Allied Corp., 66 B.R. 582, 594 (1986).

10. Parol evidence rule did not prohibit consideration of the existence of an agency agreement made prior to replacement contract. Barbara Oil Co. v. Kansas Gas Supply Corp., 250 Kan. 438, 452, 453, 827 P.2d 24 (1992).

11. Whether buyer's course of dealing evidence could be used to establish additional contract terms examined. Aere Consulting Corp. v. Cessna Aircraft Co., 867 F. Supp. 1480, 1489 (1994).

12. Whether issue regarding whether parties intended purchase agreement to be fully integrated document precluded summary judgment examined. Betaco, Inc. v. Cessna Aircraft Co., 32 F.3d 1126, 1131 (1994).

13. Evidence of alleged unwritten gasoline dealer buying price offset arrangement not admissible under parol evidence rule. Wayman v. Amoco Oil Co., 923 F. Supp. 1322, 1336 (1996).

14. Purchase agreement was fully integrated precluding contradiction by parole evidence. Betaco, Inc. v. Cessna Aircraft Co., 103 F.3d 1281, 1286 (1996).

15. Parole evidence rule contained in statute applicable not common law rule when case involves sale of goods. School-Link Technologies v. Applied Resources, 471 F. Supp. 2d 1101, 1111 (D. Kan. 2007).

16. Cited; party believing breach of contract has duty to give seasonable notice; right to cure, when. Inter-Americas Ins. Corp. v. Imaging Solutions Co., 39 Kan. App. 2d 875, 887, 185 P.3d 963 (2008).

17. 84-2-202 instructs that commercial contracts must be viewed in conjunction with the parties' course of dealing. Cravotta v. Deggingers' Foundry, Inc., 42 Kan. App. 2d 700, 215 P.3d 636 (2009).

18. Alleged course of dealing between grain elevators operator and feedyard operator cannot be used to write association trade rules out of parties' contracts. In re Sunbelt Grain WKS, LLC, 406 B.R. 918 (2009).


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