The cause in a contract that is meant to include the text of the document (although physically separate from the contract) so it becomes part of the contract is generally called the:
incorporation by reference clause
Which of the following is not an exception to the parol evidence rule?
1. Forgerty
2. Duress
3. Illegality
4. Stupidity (Correct answers, other applies)
Regarding the parol evidence rule, which if the following only considers the information within the written contract?
The four corner test
Parol evidence is
other agreement the parties made prior to the written agreement/contract
If a party transfers his or her rights in a contract to another
1. It is an assignment of rights
2. It can be partial assignment or total
The party for whom a contract is specifically intended to benefit is an
intended beneficiary
WHOLE Contract:
all of the performances within that contract are required in order to accomplish full performance by a party.
DIVISIBLE (Severable) Contract:
separate performance obligations are given in exchange for separate performance obligations which can be separately enforced.
Incorporation By Reference
The "incorporation by reference clause" incorporates all terms of the document as though it was part of the original contract and written out in full.
Parol Evidence
Evidence offered to show other agreements entered before or at the time of the entering the written contract.
Parol Evidence Rule
A rule of Evidence regarding what may be considered.
"Terms set forth in a writing intended by the parties as a final expression of their agreement...may not be contradicted by evidence of any prior agreement or of a contemporaneous oral agreement".
If a parol evidence objection is made, the court must determine whether the writing was intended by the parties as a final expression of their agreement using acceptable tests.
(1) Four corner test (look only at the document).
(2) Four corner-plus test (look at the document plus other). (3) "Integration clause" test
If the parol evidence contradicts the writing
then the evidence may not be admitted or considered.
An INTEGRATION CLAUSE in the contract, establishes that the parties intended the writing as the final expression of their agreement.
Parol Evidence is not admitted to contradict the writing.
UNLESS Parole Evidence is admitted to show that the integration clause was included by fraud, duress, or mistake.
Assignment
When rights and obligations under a contract can be assigned to third parties
ASSIGNMENT OF RIGHTS:
Transfer of a party's rights in the contract to another.
DELEGATION OF DUTIES:
Transfers of a party's contractual duties to be performed by another.
As a general rule, contracts are assignable without the permission of the other party, with 2 major exceptions:
(1) Contract Prohibition (the terms of the contract expressly forbid it).
(2) Assignment Changes Risks or Obligations of the other party.
INCIDENTAL BENEFICIARY:
a third party who will benefit from the contract, but that benefit is so removed and remote that the beneficiary receives only an incidental benefit from the contract
INTENDED BENEFICIARY:
a party that is intended to receive a benefit in the contract