1 professor of law loyola law school, los angeles chapter 1 introduction

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Problem 50 – Contract to deliver home appliances to a housing development construction project. The workers at the project cease work at 5 PM. The appliances are delivered at 6 PM. With no one on the premises to accept delivery, the delivery persons place the appliances in the garage of one of the homes and close the garage door. The appliances are then stolen before the construction workers show up the next day. Has the risk of loss passed? See §§ 2-503(3) and 2-509(3). See also Ron Mead T.V. & Appliance v. Legendary Homes, Inc., 746 P.2d 1163 (Okl. App. 1987).

2. Cases Where Shipment is Involved
Often the contract will require that the goods be shipped by carrier, especially in international commercial transactions. In these cases, we must distinguish between “shipment” contracts and “destination” contracts. Under a “shipment” contract the obligation of the seller is to place the goods into possession of a carrier, make a reasonable contract for shipment, obtain and forward to the buyer documents necessary for the buyer to take possession of the goods upon delivery (e.g. a negotiable bill of lading) and promptly notify the buyer of shipment. The risk of loss and expense of shipment then passes to the buyer. See UCC §§ 2-504 & 2-509. Compare CISG Articles 30-34 and 67. Under a “destination” contract, the seller is obligated at its own risk and expense to deliver the goods to the destination indicated in the contract, probably the buyer’s place of business.
If the parties contract to ship goods but do not express whether it is a shipment or destination contract, the default is that it is a shipment contract. See Comment 5 to 2-503. Compare CISG Art. 31, Often, parties will use shorthand terms to indicate the duties of the parties, such as F.O.B. (“free on board”) or C.I.F. (“cost, insurance and freight”). UCC §§ 2-319 – 2-325 explain what these shorthand terms mean, although they are always subject to contrary agreement between the parties. In fact, Amended Article 2 deletes sections 2-319 through 2-324 because of the view that the definitions given might be misleading in some cases. The following case demonstrates how parties might use delivery terms in ways that differ from the UCC’s definition of those terms.
NATIONAL HEATER COMPANY v. CORRIGAN COMPANY MECHANICAL CONTRACTORS
United States Court of Appeals, Eighth Circuit

482 F.2d 87 (1973)
STEPHENSON, Circuit Judge.
This diversity action springs from a contract dispute between two subcontractors. Appellant-seller (National Heater) brought the action in the United States District Court for the Eastern District of Missouri to recover the balance allegedly due on a purchase contract for certain heaters. Corrigan Company, the buyer, counterclaimed. The trial court judgment was in favor of Corrigan on its counterclaim. Judge Regan found that harm to appellee Corrigan totaled $63,291.04 as a result of damage in transit, late delivery, and work done by Corrigan to conform the goods to contract specifications. On appeal the master issue raised by appellant is that the risk of loss for goods in transit should not have been attributed to it.
On March 1, 1969 National Heater made a proposal "to the trade" concerning the price of certain heating units to be used in construction at the Chrysler automobile plant in Fenton, Missouri. The proposal priced the merchandise F.O.B. St. Paul, Minnesota "with freight allowed." Based in part upon National Heater's proposal, Corrigan made its bid on the construction job and was awarded the contract. Thereafter, appellant received appellee's purchase order listing "Price $275,640-Delivered." Appellant then mailed to appellee an "Acknowledgment of Purchase Order" bearing the printed words "Sale Price Total" followed by this typed language: "$275,640.00 Total Delivered to Rail Siding." Expressly made a part of this acknowledgment was the condition that "delivery of equipment hereunder shall be made f.o.b. point of shipment unless otherwise stated." The trial court determined that the parties had by these writings contracted for appellant to deliver the goods to the construction site and that the attendant risk of loss in transit therefore was appellant's burden. The court states:
"[t]he statement on the face of the acknowledgment which obligated plaintiff to deliver the merchandise 'to rail siding' comes clearly within the 'otherwise stated' provision of the condition. The manifest intention of the parties, in view of their entire course of conduct, was that delivery was to be made not F.O.B. point of shipment but to the rail siding on the job."
We agree. To hold otherwise would contradict the writing. We must give effect to the intention of the parties as expressed in the unequivocal language employed.
Several circumstances surrounding this contract further convince us that the trial court was correct. Both litigants agree that the Uniform Commercial Code having been adopted in Minnesota and Missouri prior to the formation of this contract, should apply to this law suit. The Code provides that evidence relating to course of performance between the parties is relevant in determining the meaning of the agreement. Uniform Commerical Code § 2-208.
Appellant argues that the term "delivered" in appellee's purchase order and the term "delivered to rail siding" in the acknowledgment referred only to price.^²⁴ As heretofore mentioned the original proposal to the trade made by appellant had previously established that freight would be allowed. Yet both parties typed in the provisions concerning delivery on their forms. In addition appellant made no protest about the "delivered" term in a letter he sent to appellee accompanying the acknowledgment. He did take exception to another provision of the purchase order concerning a ten percent retainage by the buyer pending acceptance. It seems to us as it did to the trial court that the parties were contemplating where delivery would take place rather than price.
When a contract is partly written or typewritten and partly printed any conflict between the printed portion and the written or typewritten portion will be resolved in favor of the latter.. Appellant's form acknowledgment accepted the purchase order "subject to the conditions of sale and trade customs set forth on the reverse side." Condition 7 on the back of the acknowledgment provided that "all risk of loss or damage following delivery to point of shipment shall be borne by the purchaser." If any ambiguity in fact exists between this condition and the typed provision "delivered to rail siding" the conflict should be resolved in favor of the typewriting. It is also true that any ambiguity in the acknowledgment must be construed against appellant since it drafted the document. We conclude that the parties by their written documents agreed that appellant was to deliver the goods to the job site.
In reaching our result we are not unmindful that the F.O.B. term usually indicates the point at which delivery is to be made and will normally determine risk of loss. We also note that the "destination" type contract which we envision this to be is the variant rather than the norm. Uniform Commercial Code § 2-503 Comment 5; W. Hawkland, Sales and Bulk Sales at 58 and 94 (2d Ed. 1958). The provisions of the Uniform Commercial Code may nevertheless be varied by agreement. Uniform Commercial Code § 1-102 and Comment 3. The written documents persuade us that National Heater specifically agreed to deliver the goods to their destination.
Affirmed.
Problems
Problem 51 - If the contract had simply stated “FOB St. Paul Minnesota with freight allowed,” who would have the risk of loss if the goods were damaged between St. Paul and Missouri? What if the carrier had inadequate insurance to cover the loss to the goods that occurred during the shipment? See UCC §§ 2-319, 2-504(a); Cook Specialty Co. v. Schrlock, 772 F. Supp. 1532, 16 UCC Rep. Serv.2d 160 (E.D. Pa. 1991).
Problem 52 - If the contract had stated “CIF Fenton, Missouri,” and seller complied with the requirements of UCC § 2-320, who would have the risk of loss if the goods were damaged between St. Paul and Missouri? Is a CIF contract a “shipment” or “destination” contract in terms of risk of loss?
Note and Problem
In an international contract of sale, the parties may use “Incoterms” which provide the buyer’s and seller’s obligations regarding shipment and delivery. The Incoterms are devised by the International Chamber of Commerce and are similar, but not identical, to the shorthand delivery terms contained in UCC §§ 2-319 – 2-323. Brief descriptions of the Incoterms can be found at the International Chamber of Commerce website, http://www.iccwbo.org/incoterms/preambles.asp. Some of the Incoterms are not found in the UCC, such as CIP (“carriage and insurance paid to”), which means that the price paid by the buyer includes the cost of shipment to the place of destination and insurance. The seller is obligated to deliver the goods to the carrier, pay the freight and purchase insurance before the risk passes to the buyer. Also, FOB is always a shipment contract under the Incoterms, while it may be either a shipment or destination contract under the UCC. Under the Incoterms, a CIF contract always involves carriage by waterborne vessel and requires the seller to deliver the goods over the ship’s rail at the port of shipment. For further discussion of the differences between the Incoterms and the UCC Article 2 shipment terms, see Spanogle, Incoterms and UCC Article 2 – Conflicts and Confusions, 31 Int’l Lawyer 111 (1997).
Problem 53 – Contract for the sale of goods. The contract provides that the price is $500 per unit “FCA Seller’s Warehouse Hamburg INCOTERMS 2000.” What are the seller’s delivery obligations under such a contract? See http://www.iccwbo.org/incoterms/preambles/pdf/FCA.pdf.
B. GAP FILLERS
Both the UCC and the CISG contain a number of provisions designed to fill in the gaps in sales contracts if the parties have not expressly agreed to certain terms but have otherwise indicated an intent to be bound to a contract. Arguably, almost all of the provisions in the UCC and CISG are “gap fillers” since parties are generally permitted to derogate from most of the UCC and CISG’s provisions. See UCC § 1-102 (Revised UCC § 1-302) and CISG Art. 6.
UCC section 2-204 contemplates the need for gap filler sections when it states, “Even though one or more terms are left open a contract for sale does not fail for indefiniteness if the parties have intended to make a contract and there is a reasonably certain basis for giving an appropriate remedy.” In the UCC, the gap filler provisions are generally found in Part 3 of Article 2. For example, section 2-308 tells us that if the parties have not agreed on a place for delivery of goods that are known at the time of contracting to be at the seller’s place of business, the place of delivery is the seller’s place of business. If the parties have not agreed to a time of shipment, it is to be a reasonable time. UCC § 2-309. For the definition of “reasonable time,” see UCC § 1-204 (Revised UCC § 1-205). Comparable CISG gap filler provisions are sprinkled among the Articles dealing with “obligations of the seller” (Articles 30-34) and “obligations of the buyer” (Articles 53-59).
The UCC and arguably the CISG also provide provisions that help fill gaps on such fundamental terms as price and quantity. In your contracts class, you probably studied the gap fillers regarding price and UCC § 2-306 regarding output and requirements contracts. The following case demonstrates the UCC approach to cases in which the terms are somewhat indefinite.

H.C. SCHMIEDING PRODUCE COMPANY v. CAGLE
Supreme Court of Alabama

529 So.2d 243 (1988)
According to Cagle, [a] contract arose in part from at least two telephone conversations with Schmieding's employees, one of which occurred at the end of February 1985, and one of which took place in May 1985. Cagle introduced evidence at trial to the effect that Schmieding had agreed in these conversations to pay Cagle $5.50 per bag for approximately 10,000 bags of white potatoes and to pay him the market price at harvest time for all of his red potatoes grown on 30 acres of land.
Schmieding denied the existence of this alleged contract and refused to pay Cagle for his potato crop at harvest time.
Schmieding argues that, assuming a potato sales contract of some form was in fact entered into, that contract is nevertheless unenforceable because its terms are indefinite. We disagree.
Schmieding argues that the alleged contract fails for indefiniteness due to its numerous "open terms," such as time and place of delivery and various warranties that the potatoes would meet certain specifications. In addition, Schmieding also argues that the price term for the red potatoes, i.e., "market price at time of harvest," is also too indefinite to allow enforcement of the contract.^²⁵
Although Schmieding's argument might have had some merit under pre-UCC cases, this argument has no chance of success on these facts under the UCC. The controlling section in this regard is UCC § 2-204(3), which provides as follows:
"Even though one or more terms are left open a contract for sale does not fail for indefiniteness if the parties have intended to make a contract and there is a reasonably certain basis for giving an appropriate remedy."
We have previously noted that evidence was presented at trial indicating that at least the following terms were agreed upon: 1) the type of potatoes ordered (red potatoes and white potatoes), 2) the quantity ordered (in terms of "bags" or acreage), 3) the price to be paid for the quantity ordered ($5.50 per bag for the whites, market price at harvest for the reds), and 4) the approximate delivery date (at harvest).
This evidence, as well as that noted in our previous discussion, puts to rest any argument as to whether, under the first prong of the test in § 2-204(3), the parties "intended to make a contract"--sufficient evidence was introduced by Cagle to require that this question of fact be submitted to the jury.
Similarly, these terms, if in fact entered into, would also provide a "reasonably certain basis for giving an appropriate remedy." Thus, the legal question posed by the second prong of § 2-204(3) must also be answered in the affirmative. The alleged contract clearly delineates a promise to sell identifiable goods of a specified type and quantity at a specified or reasonably determinable price and time. Consequently, we think the value of this contract to either party is susceptible to reasonably certain measurement by a court and jury, and that an appropriate remedy for its breach could be provided.
Accordingly, even though the contract contains several open terms in addition to those expressly noted, the contract does not fail for indefiniteness, because such open terms may be supplemented by the UCC's "gap-filler" provisions. For instance, time, place, and manner of delivery are dealt with in UCC §§ 2-307, -308, -309, and, similarly, the quality of the potatoes would likely have been guaranteed under one or more of the Code's warranty provisions, see UCC § 2-313 – 2-315. Moreover, a market-based open price term (such as that chosen for the red potatoes in the instant contract) is expressly recognized by the Code as an acceptable contract term, see UCC § 2-305(1)(c). Accordingly, Schmieding's argument that the terms of this contract are indefinite is without merit, and the trial court did not err in submitting this claim to the jury.
Notes, Questions and Problems
1) It is important to note that UCC section 2-305 will supply a price only if the parties have intended to form a contract even though the price is not settled. If they only intend to have a binding agreement upon settlement of the price, then there is no binding contract between them until they agree on price.
2) Note that the court indicates that the buyer would have had a better argument that no contract had been formed under the law predating the adoption of the UCC. Why would the drafters of the Code seek to enforce more agreements in which important terms, such as exact price and delivery date, had not been expressly agreed upon?
Problem 54 - The CISG is somewhat schizophrenic in its consideration of open price term contracts. Consider the following hypothetical: Company A, a manufacturer of agricultural equipment, offers to sell to Company B a tractor and a rake. Delivery is to be in one month after acceptance. The price of the tractor is listed in the offer at $50,000 but no price is listed for the rake. Company B accepts Company A’s offer. At the time of the acceptance, the market price of the rake was $8,000. At the time of delivery the market price of the rake is $9,000. Was there an offer? See CISG Article 14. Is there a contract? How is the price to be determined? See CISG Article 55. Should Article 55 have meaning only in countries that have opted out of Part II of the CISG pursuant to CISG Article 92?^²⁶ See also the Secretariat Commentary to the predecessor to Article 55. See Transcript of a Workshop on the Sales Convention, 18 J. of Law & Commerce 191-258 (1999), http://www.cisg.law.pace.edu/cisg/biblio/workshop-14,55,18.html. See also Gillette & Walt, Sales Law: Domestic and International 117-123 (rev. ed.).
C. Contract Interpretation
CISG Article 8 states that in interpreting the terms of the agreement, the actual intent of a party governs as long as the other party knows or could not be unaware of that intent. Otherwise, each party’s statements or actions “are to be interpreted according to the understanding that a reasonable person of the same kind as the other party would have had in the same circumstances.” CISG Article 8(2). As is the case with the UCC, trade usage and practices between the parties are relevant in determining the terms of the contract. Compare CISG Art. 9 to UCC §§ 1-205 & 2-208 [Revised UCC § 1-303].
In interpreting international contracts, the UNIDROIT Principles on International Commercial Contracts may also be helpful. Chapter 4 of the Principles contains several rules pertaining to contract interpretation. For example, Article 4.7 states that if a contract is drawn up in two languages and if there is a discrepancy between the two versions, the original version of the contract should control. The Principles also have rules with regard to standard form contracts and state that terms in a standard form are not enforceable if they are not within the reasonable expectations of the party who did not prepare the form. Principles Article 2.1.20. The Principles have a parol evidence rule, but indicate that parol evidence may be admissible to explain the meaning of an agreement. Principles Article 2.1.17.
The UCC does not contain rules of contract interpretation similar to CISG Article 8. Article 8 is similar to the rules stated in Restatement (Second) of Contracts §20. The UCC does have, however, a version of the parol evidence rule, which you probably spent some time considering in your Contracts class. See UCC § 2-202. As you remember, the parol evidence rule bars evidence of prior agreements or contemporaneous oral agreements to contradict a partially integrated written contract or to supplement a completely integrated written contract. The following two cases demonstrate the different approaches taken by the UCC and the CISG on the question of parol evidence. Compare UCC § 2-202 with CISG Article 8(3).
J.A. INDUSTRIES v. ALL AMERICAN PLASTICS
Court of Appeals of Ohio

133 Ohio App. 3d 76, 726 N.E.2d 1066 (1999)
This summary judgment appeal arises from the bulk purchase of certain manufacturing equipment by plaintiff-appellant, J.A. Industries, Inc., from defendant-appellee All American Plastics ("AAP"). At the time of the purchase, defendant-appellee G. Richard Howard was the president and a minority shareholder of All American Plastics, and James M. Appold was the president and sole shareholder of appellant J.A. Industries, Inc.
Primarily at issue in this case is a particular piece of equipment called a "calendar line," which makes rolls of plastic sheeting. In the summer of 1993, Appold observed the calendar line at appellees' factory and expressed an interest in purchasing the machinery to make polystyrene cookie trays for use by his business, Consolidated Biscuit, Inc. Pursuant to an agreement unrelated to this case, Consolidated Biscuit was required to use polystyrene trays that met specifications issued by Nabisco, Inc.
Shortly after Appold's visit to appellees, Howard telephoned Appold and told him that AAP's equipment was for sale; so Appold and his associate Bill Varney returned to the AAP premises to inspect the calendar line and other equipment. Appold observed the calendar line producing styrene and was also aware that the calendar line had not previously been used to make polystyrene. However, Appold indicated that if the calendar line could be used to produce polystyrene, his investment company J.A. Industries would be interested in acquiring AAP's assets. Based on Appold's visit, the parties began discussions in anticipation of a sale.
During sale negotiations, the parties employed a firm called Stratenomics to help facilitate the process. This firm prepared a written report entitled "Acquisition Scenarios," which contained the following paragraph:
"It is recommended that for both parties to evaluate the efficacy of this acquisition scenario, that an R & D phase be initiated at the earliest possible time. [J.A. Industries] would commit $60,000 for a 60 day effort that would include producing polystyrene sheets to agreed upon specs. A limited vacuum forming test would be undertaken by All American to verify tolerance and application of the calender [sic] generated sheets." (Emphasis added.)
At some point, Appold asked AAP to provide him with a sample roll of polystyrene produced from the calendar line. Despite the fact that the Stratenomics report suggested that appellee should be responsible for a "limited vacuum forming test," Appold apparently determined that he would be responsible for the testing. Howard provided the sample roll of plastic on behalf of AAP; and based on the results of that test, Appold determined that the polystyrene was "close to being usable" for formation into plastic cookie trays. However, no tests were run to ensure that sample roll conformed to the "agreed upon" Nabisco composition specifications. Appold testified at his deposition that at no time did Howard or anyone else from AAP represent orally or in writing that the sample roll he had been given conformed to the Nabisco composition specifications. Appold stated that he assumed that the sample roll met the specifications.
The parties completed the equipment sale in a written contract dated December 14, 1993. The contract contains the following relevant clauses:
"To the best of SELLER's knowledge and belief, no representation or warranty contains any untrue statement of facts or omits to state any fact necessary in order to make the statements made not misleading to BUYER.
"* * *

"Except as expressly provided in this Agreement, neither party has made any representation or warranties to the other with respect to the Equipment.

"* * *

"This writing constitutes the entire agreement of the parties with respect to the subject matter hereof and may not be modified, amended or terminated except by a written agreement specifically referring to this Agreement signed by [AAP] and [J.A. Industries]."

Shortly after the sale of the business, it became apparent that the calendar line was incapable of producing plastic sheeting in conformance with the Nabisco specifications. Composition testing performed on a second sample roll confirmed that it contained a chemical not permitted under the specifications.
J.A. Industries filed a complaint against AAP and Howard on August 21, 1997, asserting claims for fraudulent inducement, negligent misrepresentation, and rescission.
On July 15, 1998, appellees AAP and Howard filed a joint motion for summary judgment, arguing that Appold had admitted at his deposition that neither Howard nor anyone else from AAP ever told him that the sample roll met the Nabisco specifications. Appellees also argued that even if such statements were made, the parol evidence rule and lack of any justifiable reliance barred all of appellant's claims as a matter of law.
In an affidavit accompanying appellant's memorandum contra for summary judgment, Appold supplemented his earlier deposition testimony and asserted that several months prior to the delivery of the sample roll, he met with Howard and AAP's plant manager Dan Chatel at his office. Appold's affidavit states that at this meeting he informed Howard that he would only be interested in purchasing AAP's calendar line and related equipment if it could produce polystyrene sheeting in accordance with the specifications required by Nabisco. Appold also stated that he provided Howard a copy of these specifications at that same meeting and that Howard "represented and agreed" that the composition of the polystyrene produced by the calendar line would be in conformity with the Nabisco specifications.
On September 15, 1998, the trial court granted summary judgment to appellees on all claims asserted in the amended complaint. The trial court determined that the parol evidence rule barred appellant's claims and that even if parol evidence were admitted, appellant could not have justifiably relied upon any representations made by Howard.
Appellant's argues that the trial court improperly concluded that the parol evidence rule bars evidence of both the Stratenomics report and alleged representations by Howard that the sample roll would be produced in accordance with the Nabisco specifications. The trial court reasoned that because the parol evidence rule bars Howard's alleged representations and because appellant's claims rest on those representations, appellant's claims were barred. Appellant contends that the trial court failed to recognize the distinction between representations concerning the equipment, which are barred by the parol evidence rule, and representations concerning the sample produced from the equipment, which appellant argues are not barred.
In addressing this argument, we first observe that there are actually two clauses contained in the contract that are particularly relevant to our analysis. The first clause operates to exclude any prior or contemporaneous warranties not contained in the agreement. However, appellant argues that the warranty exclusion clause in the agreement is limited by its terms to the equipment that is the subject of the contract, and thus that it does not apply to representations regarding the sample roll of plastic:
"Except as expressly provided in this Agreement, neither party has made any representation or warranty to the other with respect to the equipment." (Emphasis added.)
However, the transaction between the parties was not for the sale of a roll of plastic. The composition of the sample roll has no independent significance to the deal between the parties apart from the information it provides regarding the inability of the calendar line to produce polystyrene that conforms to the Nabisco specifications. Any representations as to the sample roll are therefore essentially representations as to the equipment and are excluded as prior warranties under the quoted passage.
Moreover, even if we are to assume that the representations do not relate to the equipment and are thus not excluded under the foregoing clause, they would be excluded under the parol evidence rule and the contract's merger clause. The parol evidence rule is a rule of substantive law designed to protect the integrity of final written agreements. It operates by excluding evidence of negotiations, understandings, promises, or representations made prior to or contemporaneously with a final written contract.
[The court quotes from UCC § 2-202]
Normally, the parol evidence rule would exclude all oral representations contradicting a written agreement where that contract is a "final expression" of the agreement between the parties. It appears that appellant does not dispute that the contract at issue in this case is a final expression of the agreement between the parties. Instead, appellant argues that the parol evidence rule does not apply to cases of fraud, and, alternatively, that the representations do not contradict the agreement but are instead consistent additional terms that may be added to the contract.
We believe Ohio law is well settled that the parol evidence rule may apply to exclude evidence of fraudulent inducement in certain cases.
"[M]any Ohio cases have held that a party may offer evidence of prior or contemporaneous representations to prove fraud in the execution or inducement of an agreement. Indeed, without such evidence it would be difficult if not impossible to prove fraud. However, it is important to realize that the law has not allowed parties to prove fraud by claiming that the inducement to enter into an agreement was a promise within the scope of the integrated agreement but which was not ultimately included in it. Hence, if there is a binding and integrated agreement, then evidence of prior or contemporaneous representations is not admissible to contradict the unambiguous, express terms of the writing." (Emphasis added and citations omitted.) Busler v. D & H Mfg., Inc. (1992) 81 Ohio App.3d 385, 390-391, 611 N.E.2d 352, 356 (citations omitted).
Thus, admissibility of both the Stratenomics report and the statements allegedly made by Howard rest on the question of whether information as to the sample roll of plastic was "within the scope of the integrated agreement but which was not ultimately included in it." Busler, 81 Ohio App.3d at 390, 611 N.E.2d at 356.
As we have previously noted, the Stratenomics report is entitled "Acquisition Scenarios" and consists of suggestions designed to facilitate the sale of the assets of appellee AAP to appellant J.A. Industries, Inc. The report is therefore by its very definition information within the scope of the deal that was not included in the final agreement, and, thus, inadmissible parol evidence under Busler. Furthermore, we have previously observed that the composition of the sample roll of plastic impacts the deal between the parties only insofar as it reflects the inability of the calendar line to produce plastic pursuant to the Nabisco standards. The oral representations allegedly made by Howard as to the composition of the sample roll therefore relate solely to the ability of the calendar line to produce acceptable plastic, a subject clearly within the scope of the contract, yet not included in it. Howard's statements are thus also inadmissible under Busler.
In response to appellant's alternative argument, although UCC § 2-202 allows the admission of parol evidence of "consistent additional terms" of a contract, such terms are only admissible if the contract is not a "complete and exclusive statement" of the agreement between the parties. However, the merger clause of the agreement states:
"This writing constitutes the entire agreement of the parties with respect to the subject matter hereof and may not be modified, amended or terminated except by a written agreement specifically referring to this Agreement signed by [AAP] and [J.A. Industries]."
Here, the merger clause of the agreement expressly states that the contract "constitutes the entire agreement of the parties," and evidence of consistent additional terms is therefore precluded. For these reasons, the trial court correctly concluded that the parol evidence rule excludes the materials upon which appellant's fraudulent inducement and negligent misrepresentation claims rest. Accordingly, appellant's first assigned error is overruled.
Judgment affirmed.

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