Contracts

A 'merger clause' in a purchase contract states that the contract represents the entire agreement. What is the legal effect?

AAllows parties to add oral agreements later
BPrevents parties from using evidence of prior oral or written agreements to vary the contract's terms✓ Correct
CMerges the listing agreement with the purchase agreement
DAutomatically extends the listing period

Explanation

A merger/integration clause triggers the parol evidence rule, preventing either party from introducing prior oral or written statements to modify or contradict the final written contract.

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