Chapter 14

 

 

 

 

 

 

 

 

The Statute of Frauds

 

p  See Separate Lecture Outline System

 

Introduction

 

      This chapter covers two distinct concepts: how the Statute of Frauds affects the enforceability of a contract, and how the parol evidence rule excludes outside evi­dence offered to modify a contract.

 

      A contract that is otherwise valid may be unenforceable if it is not in the proper form—certain types of contracts are required to be in writing. If a contract is required by law to be in writing and it is not, it may not be enforceable.

 

      When a contract has been put in writing, and a dispute arises that ends up in court, the parties may not introduce evidence of prior written or oral negotiations or promises or contemporaneous oral agreements that contradict the contract terms. This is the parol evidence rule. For it to apply, the parties must have in­tended their writing to be their final agreement. Of course, as with the other concepts covered in this chapter, there are exceptions.

 

Chapter Outline

 

I.   The Origins of the Statute of Frauds

      To be enforceable, certain contracts must be in writing (even if both parties acknowl­edge an oral con­tract, it may not be enforced).  The primary purpose of this requirement is to provide reliable evidence of these contracts—a writing signed by the party against whom enforcement is sought.  This was the purpose of the Statute of Frauds enacted by the English parliament in 1677, and is the purpose of the various statutes of frauds in effect in the United States today.

 

II.  Contracts That Fall within the Statute of Frauds

 

A.  Contracts Involving Interests in Land

    Con­tracts for the sale of land—including physical objects that are permanently attached to it (buildings, fences, trees, minerals, timber)—and for the transfer of other inter­ests in land (such as mortgages) must be in writing.

 

 

Case Synopsis—

 

Case 14.1: Michel v. Bush

 

   Betty and Frank Bush owned a commercial structure in Doylestown, Ohio. In 1989, Donald Michel leased the building and, in 1993, asked the Bushes about buying the property, but did not make an offer. Three years later, Michel again asked about a sale, but the next year, the Bushes sold the property to a third party. Michel filed a suit in an Ohio state court against the Bushes, claiming, among other things, breach of contract. Michel alleged that the lease contained an “option” to buy, . which read, “First right of refusal on purchase of said property.” The Bushes denied it. Everyone agreed that the lease agreement had been in writing, but no one could provide a copy of it. The court granted a summary judgment in the Bushes’ favor. Michel appealed.

 

        The state intermediate appellate court affirmed. Ohio’s Statute of Frauds provides: “No action shall be brought whereby to charge the defendant, .  .  . upon a contract or sale of lands, .  .  . or interest in or concerning them, .  .  . unless the agreement upon which such action is brought, or some memorandum or note thereof, is in writing and signed by the party to be charged.” Under this statute, “it is clear that a claim regarding any interest in land, e.g., a right of first refusal, cannot be brought, as a matter of law, unless the agreement pertaining thereto was reduced to writing, signed by the party to be charged, and produced.” In this case, “[n]one of the parties has produced a copy of the Agreement.”

 

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Notes and Questions

 

   Considering that neither party could provide a copy of the lease, could any of its other provisions be enforced? The state intermediate appellate court noted that this was not an issue before it. As the text notes, an agreement may be enforced if both parties admit to it in a court proceeding, as was done here. Specific terms still need to be proved, but cancelled checks and other evidence can be offered in this regard.

 

 

B.  The One-Year Rule

    A contract that cannot, by its own terms, be performed within one year from the date it was formed must be in writing to be enforceable.  The one-year period begins to run the day after the contract is made.  Performance must be ob­jectively impossible.  Emphasize that even if improbable, if performance within a year is possible, a contract need not be in writ­ing. 

 

C.  Collateral Promises

    Promises made by one person to pay the debts or discharge the duties of another if the latter fails to perform must be in writing to be enforceable. Promises made by an administrator or executor to pay personally the debts of an estate must also be in writing to be enforceable. The key point in either situation is that the obligation is secondary. If the main purpose of the guarantor in accepting secondary liability is to secure a benefit for himself or herself, the contract need not be in writing to be enforceable.

 

D.  Promises Made in Consideration of Marriage

    A unilateral promise to pay a sum of money or to give property in consideration of a promise to marry must be in writing to be enforceable.The same rule applies to pre-nuptial (or antenuptial) agreements. To add certainty to the enforceability of prenuptial agreements, the National Conference of Commissioners on Uniform State Laws issued the Uniform Prenuptial Agreements Act in 1983.

 

 

Additional Background—

 

Restatement (Second) of Contracts, Section 116

 

   The following is a section of the Restatement (Second) of Contracts that relates to and is cited in this part of the text—Restatement (Second) of Contracts, Section 116.  Included is a selected Comment.

 

§ 116.  Main Purpose; Advantage to Surety

 

A contract that all or part of a duty of a third person to the promisee shall be satisfied is not within the Statute of Frauds as a promise to answer for the duty of another if the consideration for the promise is in fact or apparently desired by the promisor mainly for his own economic advantage, rather than in or­der to benefit the third person.  If, however, the consideration is merely a premium for insurance, the contract is within the Statute.

 

Comment:

 

a.  Rationale.  This Section states what is often called the “main purpose” or “leading object” rule.  Where the surety-promisor’s main purpose is his own pecuniary or business advantage, the gratu­itous or sentimental element often present in suretyship is eliminated, the likelihood of disproportion in the values exchanged between promisor and promisee is reduced, and the commercial context commonly provides evidentiary safeguards. Thus there is less need for cautionary or evidentiary for­mality than in other cases of suretyship.

 

 

E.  Contracts for Sales of Goods

    The Uniform Commercial Code (UCC) requires a writing for the sale of goods priced at $500 or more [UCC 2–201]. The writing need only state the quantity term. There are exceptions: oral contracts for specially made goods may be enforceable, and oral contracts between merchants that have been confirmed in writing may be enforceable (see Chapter 19).

 

F.  Exceptions to the Applicability of the Statute of Frauds

 

1.  Partial Performance

    In cases involving contracts relating to the transfer of interests in land, if the buyer has paid part of the price, taken possession, and made permanent improvements to the property and the parties cannot be returned to their precontract status quo, a court may grant specific performance, depending on the injury that would result if it did not.  Under the UCC, an oral contract is enforceable to the extent that a seller accepts payment or a buyer accepts delivery of the goods.

 

 

Case Synopsis—

 

Case 14.2: Spears v. Warr

 

   Edward and Hazel Warr subdivided and sold 110 acres in five-acre parcels. The Warrs told prospective buyers that water rights were included, but the deeds did not expressly convey those rights. Later, the Warrs asked the owners to pay $2,500 to $5,000 each for water rights. They refused. Melvin Spears and other owners filed a suit in a Utah state court against the Warrs, demanding the water rights. The court ruled in the plaintiffs’ favor. The Warrs appealed, insisting in part that the Statute of Frauds barred enforcement of any alleged oral contracts.

 

   The Utah Supreme Court affirmed that the plaintiffs paid for the water rights at the time they paid for the lots, and that the parties orally agreed that the water rights would be transferred after the land transaction. These oral contracts were outside the Statute of Frauds based on the doctrine of partial performance. “First, the oral contract and its terms are clear and definite. .  .  . Second, the acts done in performance of the contract are equally clear and definite. .  .  . Third, the plaintiffs’ acts were done in reliance on the contract.” Also, “failure by the Warrs to perform their obligation would result in fraud on the plaintiffs who paid for the water rights.”

 

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Notes and Questions

 

   Specific performance is the usual remedy sought in cases involving interests in land, and this case was no exception. The plaintiffs asked the court to order the Warrs to specifically perform, that is, “to convey to plaintiffs by quitclaim deed ‘sufficient water from their interest in the Rose Spring to irrigate each of their five-acre lots.’ ” The Warrs argued that this was unreasonable because “they cannot guarantee they will be able to provide this amount of water each season.” How did the court rule on this question? The state supreme court noted, “Vern Loveless, a professional engineer, testified [at trial] that .079 cfs of water would irrigate four and three-quarters acres; the remaining quarter acre would be maintained with non-irrigation water.” Also, “the deeds prepared by the Warrs indicate that they intended to convey” this quantity from Rose Spring. “Even though awarding a percentage of flow may seem sensible, given this information weighed by the trial court, we cannot say that the trial judge exceeded the permitted scope of discretion in granting specific performance and in entering the judgment it did.”

 

 

 

Additional Cases Addressing this Issue —

 

   Recent cases involving the effect of part performance, on a contract that might otherwise be void under the Statute of Frauds, include the following.

 

•  Credit Associates of Maui, Ltd. v. Carlbom, 50 P.3d 431 (Haw.App. 2002) (part performance, by a telephone service provider, of an oral contract to provide services to a sole proprietorship, the acceptance of the benefits of those services by the proprietorship, and the provider’s reliance on the oral agreement, took the oral agreement outside the Statute of Frauds).

 

•  Travis v. Fallani and Cohn, 292 A.D.2d 242, 739 N.Y.S.2d 675 (Dept. 1 2002) (part performance, by a consultant stylist and his former employer, of an oral agreement, including the stylist’s creation of original designs for decorative home products and the employer’s use, and part payment for, those designs, took the oral agreement outside the Statute of Frauds).

 

•  Metz Beverage Co. v. Wyoming Beverages, Inc., 39 P.3d 1051 (Wyo. 2002) (thirty years of performance by both a beverage bottler and a distributor was sufficient to satisfy the part performance exception to the Statute of Frauds and establish the existence of a distributorship contract).

 

 

2.  Admissions

    In some states, if a party against whom enforcement of an oral contract is sought admits in “pleading, testimony or otherwise in court that a contract for sale was made,” the contract will be enforce­able.

 

3.  Promissory Estoppel

    Some courts have used the doctrine of promissory estoppel to allow parties to recover under oral contracts that would otherwise be unenforce­able under the Statute of Frauds.

 

4.  Special Exceptions under the UCC

    Oral contracts for customized goods and oral contracts between merchants that have been confirmed in writing may be enforced in certain circumstances.

III. Sufficiency of the Writing

 

    The Statute of Frauds requires a writing signed only by the party against whom enforcement is sought.  The signature can be no more than an initial and can be anywhere in the writing.  Any confirmation, invoice, sales slip, check, or fax may be sufficient.  Under the UCC, a writing need only name the quantity.  Under statutes of frauds covering other transactions, the writing must name the parties, subject matter, consideration, and essential terms.  In some states, contracts for a sale of land must state the price and describe the property.

 

 

Case Synopsis—

 

Case 14.3: Interstate Litho Corp. v. Brown

 

   Interstate Litho Corp. negotiated with Marc Brown to buy two used printing presses. Freidel’s Manufacturing, Inc., owned one of the presses, and Graphic Engineering owned the other. Both were to be refurbished. Interstate’s president signed a proposal reflecting a $2.6 million price and advanced $75,000, of which $50,000 was wired to Freidel’s. Freidel’s pulled its press off the market, and Brown signed a contract to buy it. When the deal fell apart, Freidel’s kept the deposit and sold the press for less than it would have received from Brown. Interstate filed a suit in a federal district court against Brown and others, seeking the return of its $75,000. Brown counterclaimed for his lost profit, asserting in part breach of contract. The court awarded Brown $187,500. Interstate appealed, arguing that, among other things, there was no enforceable contract because the proposal signed by Becker lacked the essential terms and failed to comply with the Statute of Frauds.

 

   The U.S. Court of Appeals for the First Circuit affirmed. “The writing between the parties identified in detail the two presses being purchased, identified a total price for purchasing and reworking the presses ($2.6 million, with $900,000 of this amount allocated to acquiring the two presses), and set forth a detailed delivery and payment schedule. .  .  . [I]t is not required that all terms of the agreement be precisely specified, and the presence of undefined or unspecified terms will not necessarily preclude the formation of a binding contract. Here, the terms of the proposal—which include nine pages of nitty-gritty detail on matters such as rollers and hangers, plate and blanket cylinders, and ink fountains—were sufficient for the jury to find that Interstate had agreed to purchase the two presses. That Interstate wired $75,000 .  .  . to hold the presses .  .  . just a few days after signing the proposal, further supports the existence of a firm agreement between the parties.”

 

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Notes and Questions

 

   Interstate included Freidel’s in its appeal, but was Freidel’s a “proper party”? Possibly not. As the appellate court stated, “Even the authorities Interstate cites in its brief undermine its position, suggesting instead that Interstate must seek recovery of its deposit from Brown, not Freidel’s, because Interstate made the deposit to Freidel’s pursuant to its agreement with Brown.” Under the principles of restitution, a person who confers a benefit on another as the performance of a contract with a third person is not entitled to restitution from the other if the third person does not perform. The contracting party must look for payment to the one who was expected to pay. Consequently, the court awarded Freidel’s attorney’s fees and costs.

 

 

 

Additional Background—

 

What Constitutes a Sufficient “Written Memorandum”?

 

   A written memorandum can consist of any confirmation, invoice, sales slip, check, or telegram, or such items in combination may constitute a writing that satisfies the Statute of Frauds.  In other words, the entire writing does not have to consist of a single document to constitute an enforceable con­tract.  One document may incorporate another document by expressly referring to it.  Several

documents may form a single contract if they are physically attached, by staple, paper clip, or glue.  Several docu­ments may form a single contract even if they are only placed in the same envelope.  The signature need not be placed at the end of the document but can be anywhere in the writing; it can even be initials rather than the full name.

 

   For example, Sam orally agrees to sell to Terry some land next to a shopping mall.  Sam faxes to Terry an unsigned memo that contains a legal description of the property, and Terry faxes to Sam an unsigned first draft of their contract.  Sam sends a signed letter to Terry that refers to the memo and to the first and final drafts of the contract.  Terry sends to Sam an unsigned copy of the final draft of the contract with a signed check stapled to it.  Together, the documents can constitute a writing sufficient to bind both parties to the terms of the contract.

 

 

IV.  The Parol Evidence Rule

      If a writing that is determined to constitute a contract includes everything the parties intended, no evi­dence of prior oral or written negotiations or agreements or contemporane­ous oral negotiations may be used to change the terms.  Parol evidence is evidence—oral or written—out­side the writing and not made a part of the contract by a reference in the writing.  The rule applies to all writ­ten contracts, not just those governed by the Statute of Frauds.

 

      Parol evidence is admissible to show: (1) subsequent modifica­tion of a contract; (2) that a party was deceived into contracting by mistake, fraud, or mis­representation; (3) the meaning of am­biguous terms; (4) what fills in the gaps in an incom­plete contract; (5) a prior course of dealing between the par­ties or usage of trade; (6) a condi­tion to which the existence of a contract is subject (for example, that the parties agreed a contract was not binding unless their attorneys approved it); and (7) corrections of an obvi­ous typo­graphical or clerical error.

 

 

Case Synopsis—

 

Case 14.4: Cousins Subs Systems, Inc. v. McKinney

 

   Michael McKinney operates a chain of stores known as The Little Stores.  McKinney contracted with Cousins Subs Systems, Inc., to operate Cousins sandwich shops in The Little Stores.  McKinney signed documents stated that they were the parties’ entire agreement, that there were no other “understandings or agreements,” and that McKinney had not been promised any profits.  Within two years, McKinney terminated the arrangement with Cousins.  Cousins filed a suit in a federal district court against McKinney, charging, among other things, wrongful termination.  McKinney filed a counterclaim against Cousins and others, alleging, in part, breach of contract.  McKinney claimed that Daniel Sobiech, a Cousins representative, orally guaranteed, among other things, annual sales at each of the franchises of “$250,000 to $500,000.”  Cousins filed a motion to dismiss.

 

   The court granted the motion.  The court saw McKinney as “an experienced businessman who made a deal which turned out to be less favorable than he anticipated.”  The court reasoned in part that “McKinney’s attempt to invoke alleged oral agreements to contradict the terms of the written agreements is barred by the parol evidence rule.”  The court pointed out that “[t]he presence of the integration clauses in the written agreements makes clear that the contracts were intended to embody all of the agreed on terms.”

 

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Notes and Questions

 

   McKinney’s allegations included claims of fraud, breach of fiduciary duty, breach of the implied duty of good faith and fair dealing, and violation of a Minnesota state statute concerning promises made in connection with franchises.  Did all of his claims fail for the reasons stated in the excerpt from the court’s opinion?  Yes.  As the court said in rejecting his claim for breach of the implied duty

of good faith and fair dealing, “where a written contract is intended to be the final expression of an agreement it may not be contradicted by contemporaneous oral agreements.”

 

   This case could be revisited when discussing the materials on franchising.

 

 

 

Additional Cases Addressing this Issue —

 

   Recent cases in which the parol evidence rule was considered include the following.

 

•  AAR International, Inc. v. Vacances Heliades S.A., 202 F.Supp.2d 788 (N.D.Ill. 2002) (alleged oral promises made by an aircraft lessor at a demonstration flight, to repair the aircraft’s engines at its own expense, were not enforceable because the lease contained an integration clause, stating that the lease constituted the entire agreement between the parties and superseded all prior agreements and understandings).

 

•  True North Composites, LLC v. Trinity Industries, Inc., 191 F.Supp.2d 484 (D.Del. 2002) (testimony by witnesses as to the intent of the parties in entering into an agreement, as to how modifications to contract specifications were to be handled, and as to the number of items that were to be produced under the contract, was consistent with the terms of the parties’ agreement, and thus the parol evidence rule did not require the exclusion of the testimony).

 

•  Garland v. Branstad, 648 N.W.2d 65 (Iowa 2002) (parol evidence establishing that the parties to a $100,000 promissory note, which was secured by a real estate mortgage, entered into an oral agreement after the execution of the note, according to which they altered the terms of payment, was admissible, under the exception to the parol evidence rule allowing for the admission of evidence of a subsequent modification of a written contract).

 

•  Mackall v. Fleegle, __ Pa.Super. __, 801 A.2d 577 (2002) (the nature and quantity of an interest in certain land, which the owner claimed to have been an easement, was to be ascertained from the conveying instrument itself and could not be orally shown, in a case involving a quiet title action over land through which a railroad track ran).

 

 

V.   The Statute of Frauds in the International Context

Contracts for international sales of goods are governed by the 1980 United Nations Convention on Contracts for the International Sale of Goods (CISG). Article 11 of the CISG does not include the formal requirements of the Statute of Frauds. This accords with the legal customs of most nations, in which contracts do not need to meet certain formal or writing requirements to be enforceable.

 

 

Teaching Suggestions

 

1. For a manager, the most important of the contracts that must be in writing to be enforceable under the Statute of Frauds are land-related contracts, promises to pay another’s debt, contracts for the sale of goods priced at $500 or more, and contracts that by their terms cannot be completed within one year of the date of contracting.  The last is the most difficult; even courts sometimes misapply it.  Students should be told to con­centrate on the words “by its terms” because they are the key to understanding the rule.  Ordinarily, a con­tract will “by its terms” be completed within one year when no time for completion is provided or when a com­pletion time of less than one year is provided for.

 

2. The parol evidence rule excludes evidence that conflicts with a clear, complete, and unambiguous writ­ten contract. Nevertheless, many people enter into written contracts believing that oral representations made during the negotiation process but not included in the writing are part of the bargain. They find it hard to ac­cept that these oral representations are meaningless. Ask students whether they think all merchants should be required to advise buyers of the parol evidence rule before written contracts are made. Would buyers then be more inclined to have everything included in the

writing?  If some students believe that this would im­pose too much of a burden, ask whether they would accept requiring an explanation of the parol evidence rule for only some contracts, including leases, automobile-purchase contracts, real estate contracts, and others that have given rise to a number of parol evidence problems.

 

3. Contracts subject to the Statute of Frauds can be remembered in mnemonic shorthand as “MY LEG”—Marriage, Year, Land, Executor’s promise, and Goods:

 

•  Promises made in consideration of marriage.

 

•  Contracts that cannot by their terms be performed within one year from the date of formation.

 

•  Contracts that involve interests in land.

 

•  Collateral contracts, including promises by an executor or administrator of an estate personally to pay a dent of the estate and promises to answer for the debt or duty of another.

 

•  Under the UCC, contracts for sales of goods priced at $500 or more.

 

4. Exceptions to the applicability of the Statute of Frauds can be abbreviated “CAPPS”:

 

•  Confirmation of an oral contract between merchants.

 

•  Admissions.

 

•  Part performance of an oral contract for the transfer of an interest in land or for a sale of goods.

 

•  Promissory estoppel.

 

•  Goods made specially to order.

 

Cyberlaw Link

 

   Does the Statute of Frauds apply to contracts entered into on the Web?  In what ways?

 

 

 

Discussion Questions

 

1.    What is the Statute of Frauds?  All states require that certain contracts be in writing.  The statutes mandating these requirements are known as statutes of frauds.  Most of these statutes are modeled after the English Statute of Frauds. 

 

2.    Why do certain contracts have to be written to be enforceable?  The primary pur­pose of requiring a writing is to provide reliable evidence—a writing signed by the party against whom en­forcement is sought.

 

3.    Explain the one-year rule.  A contract that cannot, by its own terms, be performed within one year from the date it was formed must be in writing to be enforceable.  The one-year period begins the day after the contract is made.  A contract for a one-year term that begins the day the contract is made is enforceable whether or not it is in writing.  A contract for a nine-month term that starts six months later is not enforce­able unless it is in writing.  The performance must be objectively impossible.  Even if improbable, if perfor­mance within a year is possible, a contract need not be in writing.  Thus, an oral contract to do something “as long as the promisor remains in business” is enforceable—the promisor could go out of business in less than a year.

 

4.    What is a collateral promise?  A collateral promise is a secondary promise, a promise that is ancil­lary to a principal transaction or primary contractual relationship.  There are three elements to a collateral promise:  (1) three parties, (2) two promises, and (3) a promise to pay a debt or fulfill a duty only if the first promisor fails to do so.  A collateral promise is a suretyship or guaranty contract.  The key point is that the obligation of the guarantor is secondary.  Included in this category are promises made by the administrator or executor of an estate to pay personally the debts of the estate (for example, to pay legal fees out of his or her own pocket). 

 

5.    What is the “main purpose” rule?  Promises made by one person to pay the debts or discharge the duties of another if the other fails to perform must be in writing to be enforceable.  If the main purpose of the guarantor in accepting secondary liability is to secure a benefit for himself or herself, however, the con­tract need not be in writing.   For example, a creditor’s guarantee to pay a debtor’s debt to another creditor to fore­stall litigation to allow the debtor time to pay both creditors need not be written because the main purpose is to benefit the guarantor.

 

6.    What effect does part performance have on the enforcement of an oral contract?  In cases in­volving contracts relating to the transfer of interests in land, if the buyer has paid part of the price, taken pos­session, and made permanent improvements to the property and the parties cannot be returned to their pre-contract status quo, a court may grant specific performance.  This depends on the injury that would result if the court chose not to do so.  In some states, reliance on an oral contract is enough to remove it from the Statute of Frauds.  Under the UCC, an oral contract is enforceable to the extent that a seller accepts payment or a buyer accepts delivery of goods.  For example, an oral contract for 800 items that the buyer repudiates after 150 of the items are accepted is enforceable to the extent of the 150. 

 

7.    What happens if the party against whom en­force­ment of an oral contract is sought admits in court that a contract was made?  In some states, if a party against whom enforcement of an oral contract is sought admits in “pleading, testimony or otherwise in court that a contract for sale was made,” the contract will be enforceable, but only to the extent of the quantity admitted.

 

 

Activity and Research Assignments

 

1.    Under the Statute of Frauds, contracts for the sale of goods priced at $500 or more must be in writing to be enforceable.  Many students sell cars or other goods for more than $500.  Have students draft a simple con­tract that could be used to sell a used car.  Using student suggestions, have the class come up with a model used-car sales contract that would satisfy the Statute of Frauds.

 

2.    Obtain a blank, standard-form apartment lease.  Fill in the blanks, leaving ambiguities.  Possible am­biguities include retaining language that stipulates “no pets” and adding a clause that allows a tenant to keep his dog, writing in different amounts for monthly rent, and failing to indicate which of clearly alternative lan­guage is intended to apply.  Distribute copies of the filled-in lease and have students discuss how the ambi­gui­ties might be resolved by a court.

 

 

Answers to Essay Questions in

Study Guide to Accompany West’s Business Law, Ninth Edition

By Hollowell & Miller

 

1.    What is required to satisfy the writing requirement of the Statute of Frauds?  The Statute of Frauds requires a writing signed by the party against whom enforcement is sought.  The signa­ture (an initial is enough) can be anywhere in a writing.  Under the UCC, any confirmation, invoice, sales slip, check, or telegram will satisfy the requirement.  Under most other statutes of frauds (governing transactions other than sales of goods), a writing must name the parties, the subject matter, the consideration, and the es­sential terms with reasonable certainty.  In some states, contracts for the sale of land must state the price and describe the property with sufficiently so as to allow them to be determined without reference to outside sources.

 

2.    What is not admissible under the parol evidence rule?  Under the parol evidence rule, if a court finds that the parties intended their written contract to be a complete and final embodiment of their agreement, a party cannot introduce in court evidence of any contradictory negotiation or agreement that occurred before the contract was formed or any contradictory oral agreements that were made at the time the contract was formed.