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Don’t Want to Litigate? You’d Better Integrate

On Behalf of | Jul 20, 2011 | Uncategorized

The best breach of contract lawyers in Portland and Seattle will all tell you the same thing: if your contract isn’t enforceable, it’s worthless.

Any written contract, and in fact the entire body of American contract law, is aimed at maintaining expectations and providing stability in business. If you know you can enforce a contract against your vendor to deliver goods that you know you’re contractually obligated to deliver to your customer, the system can work. The flip side is also true. Without enforceable contracts and the stability they provide, the system can’t work.

That’s all good in theory, right? Nearly all of my Portland business law clients and Slinde Nelson‘s Seattle small business clients have faced the situation where even though a contract says X, the other party says that the agreement really says Y.

What’s the point of negotiating for written contract terms when the other side can just say that you agreed on something else? More importantly, how can I avoid this problem? The answer is that you have to negotiate for a contract clause that can keep the evidence of some other oral agreement out of a dispute altogether.

The mechanism to do this is called an integration clause. While the actual language of the clause can vary from contract to contract, the gist of it is a recital in the contract that the written contract embodies the entire agreement between the parties and no other oral representations or agreements were made.

A strong integration clause implicates what is known in Oregon and Washington as the parole evidence rule. The rule bars the introduction of evidence that contradicts the written terms of a fully integrated contract.

All that is legalese for the simple principle that once we reduce our deal to writing, that is the deal and nothing else. Integration is a simple but powerful mechanism for enhancing the enforceability of your contracts and providing for predictability and stability in your business operations. Without a robust integration clause in all your business contracts, you might find yourself litigating issues that might otherwise have been avoided.