Flashcards Studio

On January 10, A and B executed a written contract for the sale and installation of a precision milling machine for PHP 6,500,000. The instrument contains this clause: “This instrument contains the entire agreement between the parties; no prior or contemporaneous representations shall bind them.” On the same day, B signs a separate letter to A: “Additionally, A shall provide on-site commissioning and operator training for three days, and a two-year maintenance package including spare parts at no extra charge.” The letter is signed by both parties but is not attached to the contract and is not incorporated by reference. After installation, the milling machine malfunctions; B sues to enforce the training and maintenance package; A refuses, citing the integration clause. (a) Identify the Parol Evidence Rule doctrine and its key exceptions that would govern whether extrinsic writings may be admitted. (b) Based on the facts, is the letter admissible as a collateral contract to modify or supplement the written contract? Explain your reasoning. (c) If admissible, what effect does this have on the contract and the available remedies; if not admissible, what remedies remain for B?