American Contract Law for a Global Age, 2017a

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Review Question 1. Judge Lehman begins his dissent stating that he
essentially agrees with Judge Andrews regarding the substance of the legal rules at
issue in the case. Why exactly do the two judges reach different results while
ostensibly following the same law?
Review Question 2. Judge Andrews thinks that removing the ice house was
something that the parties naturally would have included in the written contract.
Judge Lehman disagrees. Who do you think is correct and why? And what exactly do
the judges mean when they refer to agreements as being “collateral”?
Review Question 3. Read through sections 209-213 of the Restatement
(Second) of Contracts. Would the buyers’ evidence in Mitchill be excluded under the
Restatement approach? Now consider the exceptions to the parol evidence rule stated
in sections 214-218. Which exceptions, if any, might apply in a case like Mitchill?
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MASTERSON v. SINE
Supreme Court of California
68 Cal. 2d 222, 436 P.2d 561, 65 Cal. Rptr. 545 (1968)
TRAYNOR, C.J.
[Dallas Masterson and his wife Rebecca owned a ranch. They sold the ranch to
Dallas’s sister Medora and her husband Lu Sine. In the deed, Dallas and Rebecca
(the “grantors”) reserved an option to repurchase the property. Dallas went bankrupt.
Rebecca and Dallas’s trustee sought to exercise the option to purchase the land
(whose price had presumably increased) and pay off creditors. Dallas tried to testify
that the option given to Medora and Lu was personal to him—that is, that he had no
legal right to assign it to anyone else—and therefore it did not pass to his estate. The
trial court excluded the testimony under the parol evidence rule.]
When the parties to a written contract have agreed to it as an “integration”—
a complete and final embodiment of the terms of an agreement—parol evidence
cannot be used to add to or vary its terms. When only part of the agreement is
integrated, the same rule applies to that part, but parol evidence may be used to prove
elements of the agreement not reduced to writing.
The crucial issue in determining whether there has been an integration is
whether the parties intended their writing to serve as the exclusive embodiment of
their agreement. The instrument itself may help to resolve that issue. It may state,
for example, that “there are no previous understandings or agreements not contained
in the writing,” and thus express the parties’ “intention to nullify antecedent
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UNIT 17: THE PAROL EVIDENCE RULE 345