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1. If the owner's spouse disapproves of the design and the owner refuses to allow the landscape architect to proceed with the work, is evidence of the oral agreement admissible in the landscape architect's action against the owner for breach of contract?
Shortly before the agreement was signed, the owner and landscape architect orally agreed that the writing would not become binding on either party unless the owner's spouse should approve the landscaping design.
A property owner and a landscape architect signed a detailed writing in which the landscape architect agreed to landscape the owner's residential property in accordance with a design prepared by the landscape architect and incorporated in the writing. The owner agreed to pay $10,000 for the work upon its completion. The owner's spouse was not a party to the agreement and had no ownership interest in the premises.
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If a court determines that a contract contains all of the terms regarding the parties' agreement, the parol evidence rule bars evidence of all prior or contemporaneous evidence that contradicts or modifies the written agreement. Courts often look to whether there is a merger clause as evidence that a written agreement is intended to be a completely integrated contract. Merger clauses, however, are not conclusive evidence that a writing is completely integrated. If a written agreement contains only partial information, or certain terms are missing, courts will allow certain extrinsic evidence to supplement or explain terms and provisions of the written agreement. The parol evidence rule, however, will still bar outside evidence of prior or contemporaneous agreements that contradict the written contract. In short, if a contract is partially integrated, prior consistent additional terms may be shown.
There are exceptions to the parol evidence rule when evidence is offered for the following purposes: to aid in the interpretation of existing terms; to show that a writing is or is not an integration; to establish that an integration is complete or partial; to establish subsequent agreements or modifications; to show that the terms were the product of illegality, fraud, duress, or mistake; and to show a written agreement is contingent on a condition precedent. When parties orally agree that a written contract is contingent on a condition precedent (the occurrence of an event or some other condition), the oral agreement may be introduced as evidence of the condition.
B is correct. Here, evidence of the owner and landscaper's oral agreement that the writing would not become binding on either party unless the owner's spouse should approve the landscaping design, is a condition precedent. As such, it falls within the exception to the parol evidence rule that allows evidence that shows a contract is contingent on a condition precedent. This answer choice correctly identifies that there is an exception to the admissibility of evidence showing the existence of a condition precedent prior to a binding agreement, and, as such, is correct.
A is incorrect. The parol evidence rule bars evidence of prior oral agreements that contradict or add terms to a written agreement unless the evidence of the oral agreement falls within an exception. This answer choice is incorrect because it does not acknowledge that the reason the oral agreement is admissible is that it falls within the «condition precedent» exception to the parol evidence rule.
C is incorrect. This answer choice does not acknowledge that the parol evidence rule does not bar evidence of a prior oral agreement when that evidence shows a condition precedent to the binding agreement. There are exceptions to the parol evidence rule when evidence is offered to show a written agreement is contingent on a condition precedent. When parties orally agree that a written contract is contingent on a condition precedent (the occurrence of an event or some other condition), the oral agreement may be introduced as evidence of the condition.
D is incorrect. The prior oral agreement falls within the exception of the parol evidence rule. When parties orally agree that a written contract is contingent on a condition precedent (the occurrence of an event or some other condition), the oral agreement may be introduced as evidence of the condition. This answer choice is incorrect because the prior oral agreement does not contradict the written agreement, it merely evidences that the writing would not become binding unless the owner's spouse approved the landscaping design.