Contract Provisions

Contracts contain provisions frequently and unfortunately dismissed as “boilerplate.” “Boilerplate” comes from the newspaper business and originally referred to metal sheets produced regionally or nationally and shipped to local newspapers for use on local presses without change. “Boilerplate” now describes standard contract provisions which can be changed only with difficulty.

An integration or merger clause is frequently found among a contract’s “boilerplate” provisions. Particular wording varies, but the integration clause states that the terms in the written contract are the final agreement and the written contract supersedes prior negotiations, representations, or agreements.  The integration clause limits the introduction of “parol” evidence concerning the contract. (The word “parol” or “parole” means oral. The word comes from the law French used in English courts after the Norman conquest but “parol” is still in use today. Parol evidence now includes any extrinsic evidence or evidence outside of the written contract.)

An integration clause was mentioned as a reason to prohibit introduction of a bid document in a recent court of appeals case, Preston McNees Speciality Woodworking, Inc. v. Daniel Co. (DANCO), Inc.,(February 13, 2015). The subcontract, written on a form prepared by the American Institute of Architects, provided that it contained the entire contract between the parties and that the subcontract was comprised of certain specific documents. The bid document was not included among those documents. The court declined to hear evidence concerning the bid document which differed from the subcontract.

The presence or absence of an integration clause is not always the final word, but an integration clause will make it difficult, if not impossible, to introduce evidence about the terms of an unambiguous written contract. The better practice is to confirm that any written contract includes all of your understandings.