155 When Mistake of Both Parties as to Written Expression Justifies Reformation
Where a writing that evidences or embodies an agreement in whole or in part fails to express the agreement because of a mistake of both parties as to the contents or effect of the writing, the court may at the request of a party reform the writing to express the agreement, except to the extent that rights of third parties such as good faith purchasers for value will be unfairly affected.
156 Mistake as to Contract Within the Statute of Frauds
If reformation of a writing is otherwise appropriate, it is not precluded by the fact that the contract is within the Statute of Frauds.
157 Effect of Fault of Party Seeking Relief
A mistaken party's fault in failing to know or discover the facts before making the contract does not bar him from avoidance or reformation under the rules stated in this Chapter, unless his fault amounts to a failure to act in good faith and in accordance with reasonable standards of fair dealing.
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.
210 Completely and Partially Integrated Agreements
1. A completely integrated agreement is an integrated agreement adopted by the parties as a complete and exclusive statement of the terms of the agreement.
2. A partially integrated agreement is an integrated agreement other than a completely integrated agreement.
3. Whether an agreement is completely or partially integrated 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.
211 Standardized Agreements see also Validity
1. Except as stated in Subsection (3), where a party to an agreement signs or otherwise manifests assent to a writing and has reason to believe that like writings are regularly used to embody terms of agreements of the same type, he adopts the writing as an integrated agreement with respect to the terms included in the writing.
2. Such a writing is interpreted wherever reasonable as treating alike all those similarly situated, without regard to their knowledge or understanding of the standard terms of the writing.
3. Where the other party has reason to believe that the party manifesting such assent would not do so if he knew that the writing contained a particular term, the term is not part of the agreement.
213 Effect of Integrated Agreement on Prior Agreements (Parol Evidence Rule)
1. A binding integrated agreement discharges prior agreements to the extent that it is inconsistent with them.
2. A binding completely integrated agreement discharges prior agreements to the extent that they are within its scope.
3. An integrated agreement that is not binding or that is voidable and avoided does not discharge a prior agreement. But an integrated agreement, even though not binding, may be effective to render inoperative a term which would have been part of the agreement if it had not been integrated.
214 Evidence of Prior or Contemporaneous Agreements and Negotiations see also Validity Formation Remedies
Agreements and negotiations prior to or contemporaneous with the adoption of a writing are admissible in evidence to establish
- that the writing is or is not an integrated agreement;
- that the integrated agreement, if any, is completely or partially integrated;
- the meaning of the writing, whether or not integrated;
- illegality, fraud, duress, mistake, lack of consideration, or other invalidating cause;
- ground for granting or denying rescission, reformation, specific performance, or other remedy.
215 Contradiction of Integrated Terms
Except as stated in the preceding Section, where there is a binding agreement, either completely or partially integrated, evidence of prior or contemporaneous agreements or negotiations is not admissible in evidence to contradict a term of the writing.
216 Consistent Additional Terms
Evidence of a consistent additional term is admissible to supplement an integrated agreement unless the court finds that the agreement was completely integrated.
An agreement is not completely integrated if the writing omits a consistent additional agreed term which is
- agreed to for separate consideration, or
- such a term as in the circumstances might naturally be omitted from the writing.
217 Integrated Agreement Subject to Oral Requirement of a Condition
Where the parties to a written agreement agree orally that performance of the agreement is subject to the occurrence of a stated condition, the agreement is not integrated with respect to the oral condition.
218 Untrue Recitals; Evidence of Consideration see also Formation
1. A recital of a fact in an integrated agreement may be shown to be untrue.
1. Evidence is admissible to prove whether or not there is consideration for a promise, even though the parties have reduced their agreement to a writing which appears to be a completely integrated agreement.
Topic 4 - Scope as Affected by Usage
Usage is habitual or customary practice.
220 Usage Relevant to Interpretation
1. An agreement is interpreted in accordance with a relevant usage if each party knew or had reason to know of the usage and neither party knew or had reason to know that the meaning attached by the other was inconsistent with the usage.
2. When the meaning attached by one party accorded with a relevant usage and the other knew or had reason to know of the usage, the other is treated as having known or had reason to know the meaning attached by the first party.
221 Usage Supplementing an Agreement
An agreement is supplemented or qualified by a reasonable usage with respect to agreements of the same type if each party knows or has reason to know of the usage and neither party knows or has reason to know that the other party has an intention inconsistent with the usage.
222 Usage of Trade
1. A usage of trade is a usage having such regularity of observance in a place, vocation, or trade as to justify an expectation that it will be observed with respect to a particular agreement. It may include a system of rules regularly observed even though particular rules are changed from time to time.
2. The existence and scope of a usage of trade are to be determined as questions of fact. If a usage is embodied in a written trade code or similar writing the interpretation of the writing is to be determined by the court as a question of law.
3. Unless otherwise agreed, a usage of trade in the vocation or trade in which the parties are engaged or a usage of trade of which they know or have reason to know gives meaning to or supplements or qualifies their agreement.
223 Course of Dealing
1. A course of dealing is a sequence of previous conduct between the parties to an agreement which is fairly to be regarded as establishing a common basis of understanding for interpreting their expressions and other conduct.
2. Unless otherwise agreed, a course of dealing between the parties gives meaning to or supplements or qualifies their agreement.
1-201. General Definitions.
a) Unless the context otherwise requires, words or phrases defined in this section, or in the additional definitions contained in other articles of [the Uniform Commercial Code] that apply to particular articles or parts thereof, have the meanings stated.
b) Subject to definitions contained in other articles of [the Uniform Commercial Code] that apply to particular articles or parts thereof:
- "Agreement", as distinguished from "contract", means the bargain of the parties in fact, as found in their language or inferred from other circumstances, including course of performance, course of dealing, or usage of trade as provided in Section 1-303.
- "Contract", as distinguished from "agreement", means the total legal obligation that results from the parties' agreement as determined by [the Uniform Commercial Code] as supplemented by any other applicable laws