Terms with respect to which the confirmatory memoranda of the parties agree or that are otherwise set forth in a writing intended by the parties as a final expression of their agreement with respect to such terms as are included therein may not be contradicted by evidence of any prior agreement or of a contemporaneous oral agreement but may be explained or supplemented:
(a) by course of performance, course of dealing or usage of trade (Section 55-1-303 NMSA 1978); and
(b) by evidence of consistent additional terms unless the court finds the writing to have been intended also as a complete and exclusive statement of the terms of the agreement.
History: 1953 Comp., § 50A-2-202, enacted by Laws 1961, ch. 96, § 2-202; 2005, ch. 144, § 27.
ANNOTATIONSOFFICIAL COMMENTS
UCC Official Comments by ALI & the NCCUSL. Reproduced with permission of the PEB for the UCC. All rights reserved.
Prior uniform statutory provision. — None.
1. This section definitely rejects:
(a) Any assumption that because a writing has been worked out which is final on some matters, it is to be taken as including all the matters agreed upon;
(b) The premise that the language used has the meaning attributable to such language by rules of construction existing in the law rather than the meaning which arises out of the commercial context in which it was used; and
(c) The requirement that a condition precedent to the admissibility of the type of evidence specified in Paragraph (a) is an original determination by the court that the language used is ambiguous.
2. Paragraph (a) makes admissible evidence of course of dealing, usage of trade and course of performance to explain or supplement the terms of any writing stating the agreement of the parties in order that the true understanding of the parties as to the agreement may be reached. Such writings are to be read on the assumption that the course of prior dealings between the parties and the usages of trade were taken for granted when the document was phrased. Unless carefully negated they have become an element of the meaning of the words used. Similarly, the course of actual performance by the parties is considered the best indication of what they intended the writing to mean.
3. Under Paragraph (b), consistent additional terms, not reduced to writing, may be proved unless the court finds that the writing was intended by both parties as a complete and exclusive statement of all the terms. If the additional terms are such that, if agreed upon, they would certainly have been included in the document in the view of the court, then evidence of their alleged making must be kept from the trier of fact.
Point 3: Sections 1-303, 2-207, 2-302 and 2-316 [55-1-303, 55-2-207, 55-2-302 and 55-2-316 NMSA 1978, respectively].
"Agreed" and "agreement". Section 1-201 [55-1-201 NMSA 1978].
"Course of dealing". Section 1-303 [55-1-303 NMSA 1978].
"Course of performance". Section 1-303.
"Party". Section 1-201.
"Term". Section 1-201.
"Usage of trade". Section 1-303.
"Written" and "writing". Section 1-201.
The 2005 amendment, effective January 1, 2006, added the provision in Subsection (a) that a written agreement may be explained or supplemented by course of performance and changed the statutory reference in the parenthesis to Section 55-1-303 NMSA 1978.
Parol evidence rule applicable to bills and notes. — The parol evidence rule applicable to written contracts generally is also applicable to bills and notes. Farmington Nat'l Bank v. Basin Plastics, Inc., 1980-NMSC-092, 94 N.M. 668, 615 P.2d 985.
Parol evidence may be admitted to explain, qualify, add to or subtract from agreement. Elephant Butte Resort Marina, Inc. v. Wooldridge, 1985-NMSC-014, 102 N.M. 286, 694 P.2d 1351.
Parol evidence inadmissible to change basic meaning of contract. — Parol evidence is not admissible when it would change the basic meaning of the contract and produce an agreement wholly different from, and wholly inconsistent with, the written agreement and would tend to distort the expressly stated written understanding of the parties. State ex rel. Conley Lott Nichols Mach. Co. v. Safeco Ins. Co. of Am., 1983-NMCA-112, 100 N.M. 440, 671 P.2d 1151, cert. denied, 100 N.M. 327, 670 P.2d 581; Elephant Butte Resort Marina, Inc. v. Wooldridge, 1985-NMSC-014, 102 N.M. 286, 694 P.2d 1351.
Usage of trade inadmissible where contract clear. — Where the written contract terms leave no room for a contrary construction consistent with the claimed usage of trade, the trial court correctly denies an offer of proof as to the usage of trade. State ex rel. Conley Lott Nichols Mach. Co. v. Safeco Ins. Co. of Am., 1983-NMCA-112, 100 N.M. 440, 671 P.2d 1151, cert. denied, 100 N.M. 327, 670 P.2d 581.
Contract provision may preclude action for pre-contract negligent misrepresentation. — Commercial purchaser of a computer system may not maintain an action in tort against the seller for pre-contract negligent misrepresentations regarding the system's capacity to perform specific functions, where the subsequently executed written sales contract contains an effective integration clause, and an effective provision disclaiming all prior representations and all warranties, express or implied, not contained in the contract, where there is no indication or claim that the transaction was not undertaken at arm's length or freely entered into by two commercial entities. Rio Grande Jewelers Supply, Inc. v. Data Gen. Corp., 1984-NMSC-094, 101 N.M. 798, 689 P.2d 1269.
Terms of written contract may carry over into substantially identical oral contract. — Where, after a written contract is terminated, an oral contract is entered into, and where there is a course of dealing for a number of years under the oral contract, which is identical in all respects other than to whom payment would be made, the provisions of which are fully known to and understood by the buyer, who has the obligation to give timely notice or waive any and all claims, the terms of the written contract carry over into the oral arrangement. Bowlin's, Inc. v. Ramsey Oil Co., 1983-NMCA-038, 99 N.M. 660, 662 P.2d 661, cert. denied, 99 N.M. 644, 662 P.2d 645.
Alternate financing agreement waived need for written contract modification. — Where a boat buyer's agreement with a bank concerning alternate financing was conduct waiving the need for a written contract modification, the financing terms agreed upon between the buyer and the bank became a part of the contract, and the contract was supplemented in a commercially reasonable manner. Elephant Butte Resort Marina, Inc. v. Wooldridge, 1985-NMSC-014, 102 N.M. 286, 694 P.2d 1351.
Am. Jur. 2d, A.L.R. and C.J.S. references. — 15A Am. Jur. 2d Commercial Code § 73; 68A Am. Jur. 2d Secured Transactions §§ 105 et seq., 164; 72 Am. Jur. 2d Statute of Frauds §§ 138, 297, 343.
Affirmations or representations made after the sale is closed as basis of warranty under UCC § 2-313(1)(a), 47 A.L.R.4th 200.
32A C.J.S. Evidence §§ 1168 et seq., 1183.