16. Is the court likely to admit the evidence of the orally agreed price of $100,000?

The purpose of the parol evidence rule is to prevent a party from introducing evidence of oral agreements that occurred before or while the agreement was being reduced to its final written form in order to alter the terms of the existing contract. The parol evidence rule excludes evidence of earlier written or oral agreements that contradict or add to the terms of the integrated writing. If a writing is completely integrated (i.e., intended to be the final expression of an agreement between the parties), previous oral or written terms may not come in to contradict or supplement it. If a written agreement is only partially integrated (i.e., a writing the parties intended to be final, but doesn't express the full understandings of the parties) extrinsic evidence of prior or contemporaneous agreements that contradict the written agreement are barred. With partial integration, however, additional terms or agreements that supplement the written agreement are admissible.

B is correct. Here, the parol evidence rule bars the prior oral agreement to exchange the air-conditioning system for $100,000 because this directly contradicts the written agreement. As discussed above, regardless of whether a court determines the contract form is completely or partially integrated, evidence of prior agreements that contradict the contract form is inadmissible. In this case, evidence of the $100,000 prior oral agreement is inadmissible per the parol evidence rule because it contradicts what is written in the contract. This is exactly the type of evidence the parol evidence rule bars against.

A is incorrect. In this case, there is no evidence the buyer assumed the risk of any mistake as to price. Further, this answer choice confuses the issue at hand. This question is testing whether you recognize there is a parol evidence problem, not a problem where a party assumed the risk of a mistake. As noted above, the conclusion is correct, but the reasoning is not.

C is incorrect. In the case of mistake or fraud, reformation, an equitable remedy, will be ordered if the parties have entered into a binding agreement and the writing does not conform to their agreement. Here, the facts do not point to fraud or mistake. This question is asking you to recognize there is a parol evidence problem rather than a fraud or mistake problem.

D is incorrect. Courts often look to the existence of a merger clause to determine whether a writing is completely or partially integrated. Completely integrated contracts often contain merger clauses; though, merger clauses are not conclusive evidence a contract is completely integrated. In this case, however, regardless of whether the writing is completely or partially integrated, evidence that directly contradicts the form contract is inadmissible per the parol evidence rule.