Opinion ID: 458929
Heading Depth: 3
Heading Rank: 1

Heading: Did the 1978 agreement discharge the 1977 agreement?

Text: 34 Bone's claim for interest on reserve commissions arises under the 1977 letter agreement. 11 In March 1978, after the Chicago Board of Trade required Refco to remove Bone from any supervisory position, Bone signed a form Account Executive Agreement. This agreement, which governed Bone's brokerage (sales) activity for Refco, contained a merger clause. 12 Refco asserts that the merger clause in the 1978 agreement indicates that the parties intended the 1978 agreement to be an integrated agreement which superseded the 1977 agreement and discharged its provisions. Thus, Refco contends that it is entitled to judgment as a matter of law on Bone's claims for interest on commissions and lost profits. 35 We disagree. Clearly, when an integrated agreement exists, the Arkansas parol evidence rule bars the introduction into evidence of any prior agreement to contradict the terms of the agreement. Ark.Stat.Ann. Sec. 85-2-202 (1961); see Farmers Cooperative Association v. Garrison, 248 Ark. 948, 454 S.W.2d 644, 647 (1970); R.G. Varner Steel Products, Inc. v. Puterbaugh, 233 Ark. 953, 349 S.W.2d 805, 807 (1961). It is equally clear, however, that under the parol evidence rule, a completely integrated agreement does not discharge prior agreements that do not fall within its scope, see Farmers Cooperative Association, 454 S.W.2d at 647-48; Ark.Stat.Ann. Sec. 85-2-202(b); Restatement (Second) of Contracts Sec. 213(2) & comment c (1979), and a partially integrated agreement does not discharge prior agreements that supplement, but are not inconsistent with, the integrated agreement. Farmers Cooperative Association, 454 S.W.2d at 648; Ark.Stat.Ann. Sec. 85-2-202; Restatement (Second) of Contracts Sec. 213(1). 36 A plain reading of the 1977 and 1978 agreements indicates that they are independent of each other. The 1978 agreement was simply the standard form contract Refco used for all of its commodities brokers and concerned only Bone's employment by Refco as a commodities broker. The subject matter of the 1978 agreement--daily trading activities, solicitation of customers--was wholly unrelated to the subject matter of the February 1977 letter agreement (which was individually negotiated between Refco and Bone) which dealt with the establishment of a Refco branch office in Springdale under Bone's control. These two agreements are such that one would not expect the parties to incorporate the terms of the earlier agreement or make reference to its existence in the later form contract. We are of the opinion that, taken together, the two agreements embody the entire written agreement between Bone and Refco. Accordingly, we hold that Refco is not entitled to judgment on these claims on this ground. See Lemm v. Sparks, 230 Ark. 105, 321 S.W.2d 388, 392 (1959) (giving effect to earlier contract despite merger clause in later contract where subject of agreements differed). 37