Opinion ID: 732437
Heading Depth: 2
Heading Rank: 1

Heading: Merger and Integration Clauses

Text: 24 As we observed in Betaco I, the inclusion of an integration clause in a written document is  'strong evidence'  that the parties intended that document to represent the entirety of their agreement. 32 F.3d at 1133 (quoting L.S. Heath & Son, 9 F.3d at 569). The purchase agreement executed by Betaco and Cessna contains such a clause, stating both that the signed agreement is the only agreement controlling the purchase of the aircraft, that it is binding on Purchaser and Seller, and that the agreement may not be modified in any way except by written agreement executed by both parties. Pl.Ex. 4 at 2 § IV p 7. We noted that the language of the clause is simple and straightforward, that it was not buried in fine print, and that it was not otherwise likely to be overlooked in an agreement that covered only two pages. 32 F.3d at 1133-34. We also pointed out that Mikelsons had signed the agreement containing this clause and that he had had the opportunity to review it before signing. Id. at 1134. 25 The integration clause speaks for itself, of course, and nothing adduced on remand has shaken our conviction that it constitutes strong evidence that the parties intended the written purchase agreement to constitute the full embodiment of their contract. Id. at 1133-34. On the contrary, although extrinsic evidence ordinarily is unnecessary to establish that the parties to an agreement meant what they said in their contract, 3 Mikelsons' testimony on remand only confirms that the integration clause should be taken seriously. Mikelsons acknowledged that in signing the contract, he verified that he had read it, that he understood it, and that he had full authority to bind Betaco with his signature. Tr. 85; see Pl.Ex. 4 at 1. He acknowledged what the integration clause said; indeed, when asked by Cessna's counsel what he understood the language to mean, he answered, Just exactly what it says, Mr. Buehler--that this contract is the only contract between the parties. Tr. 34. 26 Now, Mikelsons also testified that he believed that Cessna's marketing was incorporated into the agreement (Tr. 34), and the district court thought the integration clause sufficiently unclear as to what it meant by this Agreement that a layperson might think that the agreement included representations outside of the purchase agreement itself (Memorandum at 6-7). Both suppositions fly directly in the face of the plain terms of the agreement. Taking the district court's point first, we discern no ambiguity as to what is meant by this Agreement. In a document entitled PURCHASE AGREEMENT, the consistent use of this naturally points the reader to the purchase agreement itself. Any doubt in this regard is then eradicated by the first paragraph on the reverse side of the agreement, entitled TERMS AND CONDITIONS: 27 The Purchaser and Seller as set forth in Items 1 and 2 hereby enter into this Purchase Agreement (the Agreement) for the purchase and sale of one (1) Cessna CITATIONJET Model 525 Aircraft, with optional equipment as listed in Item 5 herein (the Aircraft) on the terms and conditions as set forth on the face hereof and as follows[.] 28 Pl.Ex. 4 at 2. The parties to a contract are presumed to comprehend contract terms in the way those terms are ordinarily used. E.g., McGee v. Equicor-Equitable HCA Corp., 953 F.2d 1192, 1202 (10th Cir.1992) (applying Kansas law). Thus, the district court's concerns about the lack of clarity notwithstanding, it is entirely reasonable to charge Mikelsons and Betaco with the realization that when the contract spoke of this Agreement being the sole agreement between the parties and disclaimed all representations beyond it, it meant that only those terms expressly incorporated within the two-page purchase agreement itself were part of the bargain. Mikelsons conceded that very understanding, in fact. Tr. 34. He claims to have thought that Hubbard's letter was imported into the agreement by virtue of a reference to marketing within the preliminary specifications (which were, of course, expressly made part of the purchase agreement). Tr. 34; see also Tr. 30. But that notion is both implausible and unreasonable. The word marketing appears in the preliminary specifications only twice, once on the title page and again on the introductory page, which simply indicate that the specifications were prepared by, and that more detailed information could be obtained from: Citation Marketing The Cessna Aircraft Company P.O. Box 7706 Wichita, Kansas 67277 29 Pl.Ex. 2 at 2, 3. It is one thing to infer from these unadorned references to Citation Marketing that questions left unanswered by the preliminary specifications should be directed to a marketing representative; it is quite another to infer that anything a Cessna representative might say in promoting the plane, including the type of representations made in Hubbard's letter, would become a term of the purchase agreement. In the face of contractual terms expressly disavowing extrinsic warranties, admonishing that no individual was authorized to make representations on Cessna's behalf, and providing that modifications to the agreement had to be made in a writing signed by both parties, the latter inference strains credulity.