Legal Definitions - integrated contract

In contract law, an integrated contract refers to a written document or a collection of writings that the parties intend to be the final and authoritative record of at least some of the terms of their agreement. It signifies that the parties have committed certain aspects of their deal to a definitive written form, making that writing the primary source for understanding those particular terms.

• Completely Integrated Contract

  A completely integrated contract is a written agreement that the parties intend to be the full and exclusive statement of all the terms of their deal. This means that the parties agree that the written document contains everything they've agreed upon, and no other prior discussions, promises, or understandings (whether oral or written) are part of the contract. When a contract is completely integrated, a legal principle known as the "parol evidence rule" generally prevents parties from introducing outside evidence to contradict, vary, or add to the terms found within the written contract.

  • Example 1: Software Development Agreement

    A technology company hires a freelance developer to create a custom mobile application. Their written contract is several pages long, detailing the project scope, milestones, payment schedule, intellectual property rights, and a clause explicitly stating, "This Agreement constitutes the entire agreement between the parties and supersedes all prior discussions, negotiations, and agreements, whether oral or written." After the app is delivered, the developer claims the company orally promised a bonus for early completion, which was not mentioned in the written contract.

    Explanation: The contract is completely integrated because of the explicit "entire agreement" clause. This clause demonstrates the parties' intent for the written document to be the sole and exhaustive record of their deal. Therefore, the developer would likely be prevented from introducing evidence of the alleged oral bonus promise, as it would add a term not found in the completely integrated written agreement.

  • Example 2: Commercial Property Sale

    A business owner sells their commercial building. The detailed purchase agreement specifies the sale price, closing date, property boundaries, and all fixtures included. It also contains language indicating that the written document represents the complete understanding between the buyer and seller regarding the property sale. Later, the buyer claims the seller orally promised to leave behind a specific piece of expensive office equipment that was not listed in the contract.

    Explanation: The purchase agreement is a completely integrated contract because the parties intended it to be the final and exclusive statement of their agreement. The buyer would generally be barred from introducing evidence of the alleged oral promise about the office equipment, as it would attempt to add a term to a contract that was meant to be comprehensive.

• Partially Integrated Contract

  A partially integrated contract is a written agreement that the parties intend to be the final and authoritative record for the terms it does cover, but they do not intend it to be the complete and exclusive statement of *all* terms. In this scenario, while the written terms cannot be contradicted by outside evidence, parties may be allowed to introduce evidence of additional, consistent terms that were agreed upon separately (often orally) and not included in the written document.

  • Example 1: Equipment Rental Agreement

    A construction company rents a specialized piece of machinery. The written rental agreement specifies the rental period, daily rate, and insurance requirements. However, it does not mention anything about the delivery and setup of the equipment, which the rental company orally agreed to handle at no extra charge during initial negotiations.

    Explanation: The written agreement is partially integrated. It is final for the terms it covers (rental period, rate, insurance). However, it is not complete because it omits the agreement regarding delivery and setup. Evidence of the oral agreement for free delivery and setup would likely be admissible because it does not contradict the written terms but rather supplements them with an additional, consistent understanding.

  • Example 2: Custom Furniture Order

    A client orders a custom dining table from a furniture maker. The written invoice details the table's dimensions, wood type, finish, and price. During their discussions, the client also orally requested a specific type of protective sealant to be applied, which the furniture maker agreed to do, but this detail was not written on the invoice.

    Explanation: The invoice serves as a partially integrated contract. It is final for the core specifications and price of the table. However, it is not a complete record of all terms because it omits the agreement about the protective sealant. Evidence of the oral agreement for the sealant would likely be allowed, as it adds a consistent term to the agreement without contradicting any of the written details.