Generally, integration is the act of making something whole or uniting separate things. In contract law, integration is the full expression of an agreement between parties on some subject matter.
Integration can be complete or partial. If a document is a complete integration, it expresses the entire agreement between the parties and parol evidence from outside the contract will be inadmissible. If a document is only a partial integration, then parol evidence will be admissible for any ambiguities or unintegrated terms.
An integration clause in a contract is a provision that states the contract is the final and complete agreement, thereby preventing parties from contradicting terms or providing additional ones based on previous agreements. An integration clause is also known as a merger clause.
The Uniform Commercial Code §2-202 - Final Written Expression: Parol or Extrinsic Evidence provides a rule on integration and parol evidence, stating:
“Terms with respect to which the confirmatory memoranda of the parties agree or which 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 dealing or usage of trade (Section 1-205) or by course of performance (Section 2-208); 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.”
In business law, integration may refer to horizontal or vertical integration. Both are business practices involving the consolidation of various operations under a single entity.
[Last updated in June of 2023 by the Wex Definitions Team]