Business Law 11th Edition by Kenneth Clarkson,Roger LeRoy Miller,Gaylord Jentz,Frank Cross

Exercise 1

Yocca v. Pittsburgh Steelers Sports, Inc.
Supreme Court of Pennsylvania, 2004. 578 Pa. 479, 854 A.2d 425.
• Company Profile Pittsburgh Steelers Sports, Inc., is the operating company for the National Football League's (NFL's) Pittsburgh Steelers ( www.steelers.com ). Art Rooney founded the company, which his family still owns. The team began in 1933 as the Pittsburgh Pirates, named after the baseball team. One of the star players in the early years was Byron "Whizzer" White, who led the NFL in rushing in 1938. White became a justice of the United States Supreme Court in 1962. Renamed in a contest sponsored by the Pittsburgh Post-Gazette in 1940, the Steelers had winning seasons only eight times in its first forty years. In the 1970s and 1980, the Steelers won the Super Bowl four times, adding a fifth title in 2006. Groundbreaking for a new stadium took place in 1999.
• Background and Facts In October 1998, Pittsburgh Steelers Sports, Inc., and others (collectively, the Steelers) sent Ronald Yocca a brochure that advertised a new stadium to be built for the Pittsburgh Steelers football team. The brochure publicized the opportunity to buy stadium builder licenses (SBLs), which grant the right to buy annual season tickets to the games. Prices varied depending on the seats' locations, which were indicated by small diagrams. Yocca applied for an SBL, listing his seating preferences. The Steelers sent him a letter notifying him of the section in which his seat was located. A diagram included with the letter detailed the parameters of the section, but it differed from the brochure's diagrams. The Steelers also sent Yocca documents setting out the terms of the SBL and requiring his signature. These documents included a clause that read, "This Agreement contains the entire agreement of the parties." Yocca signed the documents, and the Steelers told him the specific location of his seat. When he arrived at the stadium, however, the seat was not where he expected it to be. Yocca and other SBL buyers filed a suit in a Pennsylvania state court against the Steelers, alleging, among other things, breach of contract. The court ordered the dismissal of the complaint. The plaintiffs appealed to a state intermediate appellate court, which reversed this order. The defendants appealed to the state supreme court.
Justice NIGRO.
* * * *
* * * Where the parties, without any fraud or mistake, have deliberately put their engagements in writing, the law declares the writing to be not only the best, but the only, evidence of their agreement. All preliminary negotiations, conversations and verbal agreements are merged in and superseded by the subsequent written contract * * * and its terms and agreements cannot be added to nor subtracted from by parol evidence. Therefore, for the parol evidence rule to apply, there must be a writing that represents the entire contract between the parties. To determine whether or not a writing is the parties' entire contract, the writing must be looked at and if it appears to be a contract complete within itself, couched [implied] in such terms as import a complete legal obligation without any uncertainty as to the object or extent of the parties'engagement, it is conclusively presumed that the writing represents the whole engagement of the parties * * *. An integration a clause [a provision stating that all of the terms of the parties'agreement are included in the written contract] * * * is also a clear sign that the writing is meant to be just that and thereby expresses all of the parties'negotiations, conversations, and agreements made prior to its execution. [Emphasis added.]
Once a writing is determined to be the parties' entire contract, the parol evidence rule applies and evidence of any previous oral or written negotiations or agreements involving the same subject matter as the contract is almost always inadmissible to explain or vary the terms of the contract. One exception to this general rule is that parol evidence may be introduced to vary a writing meant to be the parties' entire contract where a party avers [asserts] that a term was omitted from the contract because of fraud, accident, or mistake. In addition, where a term in the parties' contract is ambiguous, parol evidence is admissible to explain or clarify or resolve the ambiguity, irrespective of whether the ambiguity is created by the language of the instrument or by extrinsic or collateral circumstances. [Emphasis added.]
In the instant case [the case before the court], we cannot agree with the [appellate court] that the SBL Brochure represented the terms of the parties' contract concerning the sale of SBLs. Contrary to the [appellate court's] understanding, the SBL Brochure did not represent a promise by the Steelers to sell SBLs to Appellees. Rather, the Brochure was merely an offer by the Steelers to sell Appellees the right to be assigned an unspecified seat in an unspecified section of the new stadium and the right to receive a contract to buy an SBL for that later-assigned seat. Moreover, by sending in their applications * * * , Appellees simply secured their right to be considered for assigned seats and the opportunity to receive a subsequent offer to purchase SBLs for those seats. In this respect, the SBL Brochure was similar to an option contract in that it merely gave Appellees the option to possibly accept an offer for SBLs at some later date.
On the other hand, the SBL Agreement clearly represented the parties' contract concerning the sale of SBLs. Unlike the SBL Brochure, the SBL Agreement reflected a promise by the Steelers to actually sell Appellees a specific number of SBL seats in a specified section. Furthermore, the SBL Agreement detailed all of the terms and conditions of that sale, i.e., the precise number of seats to be sold to the named Licensee, the exact section in which those seats were located (including a visual depiction of that location), the total amounts due for each SBL, the dates those amounts were due, and all of the rights and duties associated with owning an SBL, including the Licensee's right to transfer the SBL. Most importantly, the SBL Agreement explicitly stated that it represented the parties' entire contract regarding the sale of SBLs. Accordingly, we find that the SBL Agreement represented the parties' entire contract with respect to the sale of SBLs and that the parol evidence rule bars the admission of any evidence of previous oral or written negotiations or agreements entered into between the parties concerning the sale of the SBLs, such as the SBL Brochure, to explain or vary those terms expressed in the SBL Agreement.
• Decision and Remedy The Pennsylvania Supreme Court reversed the lower court's judgment. The state supreme court held that the SBL documents constituted the parties' entire contract and under the parol evidence rule could not be supplemented by previous negotiations or agreements. Because the plaintiffs based their complaint on the claim that the defendants violated the terms of the brochure, and the court held that the brochure was not part of the contract, the complaint was properly dismissed.
• What If the Facts Were Different Suppose that the Steelers had not sent Yocca a diagram with the letter notifying him of his seat's section and that the SBL documents had not included an integration clause. Would the result have been different
• The Legal Environment Dimension Could Yocca and the other plaintiffs have plausibly argued that the terms of the SBL brochure must have been integrated within the SBL agreement because those terms were needed to define and describe the section assignments to which the agreement referred Explain.
[a. Integrated contracts will be discussed later in this chapter.]