Ever wonder what an attorney looks for when you ask him or her to review a contract? There are of course a number of things that I normally look for, many of which I hope to address in future posts. Today, though, I just want to discuss one such thing - integration.
What is integration? In Ohio, when a contract is considered "complete and unambiguous," then "extrinsic" (i.e., "outside") evidence, such as emails and conversations between the parties, won't be considered by a court. (Note: Much of the material here comes from English common law that dates back ages, but for Ohio's modern adaptation of the common law, I am primarily quoting from and considering the 2007 Ohio Supreme Court Case Bellman v. Am. Internatl. Group, which you can find for yourself online if you're interested...the citation is 113 Ohio St.3d 323.) The idea is that if the contract itself appears to be a complete representation of the agreement between the parties, then a court will look no farther than the contract itself, but if the contract leaves terms, etc. open for interpretation, then a court can consider additional, "extrinsic" evidence to determine what the parties really meant. In legal terms, a contract that leaves no room for ambiguity is considered fully "integrated," and a principle of law called the "parol evidence rule" (there's no "e" at the end of "parol") prevents extrinsic evidence from being introduced.
Many attorneys add what is called an "integration" clause as a boilerplate provision to all of their contracts. An integration clause simply states that the contract is the entire agreement between the parties and that therefore no outside evidence regarding the meaning of the parties is to be considered. But does the absence of the integration clause mean that a court can automatically look to extrinsic evidence to determine the meaning of the parties? No, in Ohio it doesn't. Under the Bellman case I mentioned above, the test for integration isn't whether there is an integration clause, but rather whether the contract "appears to be a complete and unambiguous statement of the parties’ contractual intent."
Early in my practice one of the first things that I would do when reviewing a contract was to look for an integration clause. But that's not what's important. Now, I look too see if there is anything in the contract that could be left open to interpretation - any ambiguities. Does the contract to sell the "red car" mean the brand new red Mercedes or the 1990s red Toyota Corolla? If it's not clear from the contract, then I want to specify which one is meant. That way, if my client thinks he or she is getting the Mercedes and the other party delivers the Corolla, there's no question that the contract meant the Mercedes.
So the takeaway is simple - under Ohio law, it's more important for the contract to actually be complete and unambiguous than it is for there to be a clause stating that the contract is complete and unambiguous.
Please remember that these posts are for informational purposes only and should not be considered or relied on as legal advice. If you are ever in doubt about your rights under the law, you should consult an attorney familiar with the law in your area.
Ben Bauer is a Cincinnati-based attorney who writes about things in law and life that he finds interesting.