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What is an Integrated Contract?

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  • Written By: Daphne Mallory
  • Edited By: Melissa Wiley
  • Last Modified Date: 04 November 2016
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An integrated contract, also known as an integrated agreement, is one that contains the entire agreement among the parties involved. The signed contract prevents parties from making claims that verbal or other written promises were made that supersede the integrated contract. It’s possible to have a partially integrated contract in which the parties agree to leave out some of the terms of their agreement. Courts often deem that a contract is an integrated agreement unless there’s evidence to contradict that default assumption. Signatories to a contract can protect themselves by including language in the contract that states that the contract represents the entire agreement among the parties.

Courts often determine whether an agreement is an integrated contract by interpretation of the parole evidence rule. The courts rely on the contract language to interpret whether the parties intended it to be the final expression of all terms. The parole evidence rule states that prior written and oral agreements are void in the presence of an integrated contract. The terms of the contract also supersede inconsistent terms made by prior writings under the parole evidence rule. The rule is often used to help interpret the contract, but in most cases it’s not used to contradict the contract.

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There is no special form for an integrated contract. Many written contracts are integrated contracts, such as business and employment contracts. Parties can often include a clause in the contract to expressly state that there are no other written and oral agreements or that the contract represents all the terms agreed to by the parties and supersedes all prior agreements. Entire agreement clauses are often found at the end of the contract with other miscellaneous provisions. In the absence of express language, the party suing in court often has to provide proof that he or she signed an integrated contract or that other writings constituted parts of the agreement among the parties.

A partially integrated agreement omits some of the terms agreed upon. These contracts are often harder to prove because the courts assume that the agreement is a fully integrated contract. The terms that are included in the written contract are indicative of the final agreement among the parties, as it pertains to those terms. The court has the job of interpreting oral and prior written agreements to determine what the other terms are. It often does so by comparing all the prior written and oral agreements that are proved.

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NathanG
Post 3

@MrMoody - I think many people expect that standard contracts are integrated contracts. No one expects hidden clauses somewhere else or the idea that some agreement exists somewhere which renders the contract void.

However, what’s more important in my opinion is what the contract actually says, not its claims of finality. For a consultant contract, for example, you want a clear explanation of what the deliverables are, and how the client will determine that the job has been done to their satisfaction.

Nothing is more frustrating than finishing the work and not getting paid or having the client squabble over items that they didn’t indicate they wanted as part of the job.

I’ve learned a few things working as a consultant over the years, and defining in exact, quantifiable terms what final product should be is the most important lesson in my opinion.

MrMoody
Post 2

@David09 - I think that the company is just trying to protect their inventions and make sure you don’t run off with trade secrets.

I agree, however, that employment contracts are some of the most verbose, legalize filled documents that I have ever seen. Each party wants to protect themselves, and so I suppose that I understand that.

I still prefer an integrated contract to one that is partially integrated. I am guessing that a partially integrated contract might exist in situations where a contractor has agreed to perform a task, with the promise that he would be allowed to work on bigger projects upon completion of the task.

We did that once. We did some computer consulting work for a company, with the understanding that we could work on some of their bigger projects later on. Well, you can guess what happened. We completed the job to their satisfaction, thank you very much, and we heard nothing more.

David09
Post 1

A contract of employment is usually an integrated contract, at least from what I’ve seen. It starts out by saying that the employment is “at will.” Those two words always stand out at me, because they always suggest that the employer can fire you at the drop of a hat.

I know that there are some people who say that is not the case, that the employer needs a paper trail of employee reviews and so forth, in order not to be sued for unlawful termination.

But I always tell those people that employees rarely, if ever, win unlawful termination lawsuits. Therefore take the phrase “at will” at face value – you can go at any time, voluntarily

or otherwise.

The other thing that stands out in the contract of employment is the idea that the company owns your ideas created on the job. That’s a little more controversial, because ideas exist in your head, and you can easily modify an idea or tweak it to make it work somewhere else.

Nonetheless the company is clear – while you’re on the job, they own you. I suppose that’s as integrated as any contract could be in my opinion.

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