Betaco, Inc v. Cessna Aircraft, Co

Brief Fact Summary.

Betaco, Inc (plaintiff) sued Cessna Aircraft, Co. (defendant) for breach of express warranty.

Synopsis of Rule of Law.

Under Section 2-202 of the Uniform Commercial Code (UCC) courts can look beyond the 4 corners of the contract when ascertaining if the parties intended to contract to be a final and complete total integration.

Facts.

After the Plaintiff showed interest in purchasing one of the defendant’s Citationjets and the defendant forwarded information to the plaintiff pertaining to the jet. The packet with the information contained a cover letter that said the jet had a farther range than the popular Citation I jet. The packet contained a total integration clause, which means the parties intended the agreement to be final and complete. After signing the agreement, an employee of the plaintiff found the jet in fact did not have a farther range than the Citation I jet and the plaintiff sought to cancel the agreement. At trial, the plaintiff argued breach of express warranty due to the representation in the packet that said the jet had a farther range than the popular Citation I jet.

Issue.

Whether under Section 2-202 of the Uniform Commercial Code (UCC) courts can look beyond the 4 corners of the contract when ascertaining if the parties intended to contract to be a final and complete total integration.

Held.

Yes. Under Section 2-202 of the Uniform Commercial Code (UCC) courts can look beyond the 4 corners of the contract when ascertaining if the parties intended to contract to be a final and complete total integration.

Discussion.

While at common law under the parole evidence rule, courts would not consider extrinsic evidence outside of a contract if the parties intended the writing to be a final and complete total integration. Courts can consider things such as a merger clause which is usually an indication the parties intend the contract to be a total integration. They may also look to integration clauses which means the parties intended the agreement to be final and complete. However, courts will still exclude conflicting terms. Here, the agreement contained a total integration clause and thus the intention was for the agreement to be final and complete and the introduction of the information in the cover letter would be a conflicting term and cannot be introduced as parol evidence.