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Merger Clause - Fraud In The Inducement - Breach Of Contract Claim: Jones V. The Village At Lake Martin, LLC

Jones v. The Village at Lake Martin, LLC, [Ms. 2160650, Jan. 12, 2018] __ So. 3d __ (Ala. Civ. App. 2018). This unanimous decision by Judge Moore (Thompson, P.J., and Pittman, Thomas, and Donaldson, JJ., concur) affirms in part and reverses in part the Tallapoosa Circuit Court’s summary judgment dismissing the plaintiffs’ breach of contract and fraud in the inducement claims. The Joneses purchased a lake house from the Village and in the contract of sale, the Joneses stated in a note the Joneses initialed that “Buyer requests boat slip in next phase 1st choice – $10,000 to be paid at availability.” Ms. *3. Subsequently when the Village refused to sell the boat slip for $10,000, the Joneses filed suit for breach of contract and fraudulent inducement. The Tallapoosa Circuit Court granted summary judgment dismissing the Joneses fraud in the inducement and breach of contract claims based upon the integration or merger clause in the contract. Ms. *2.

The court affirmed dismissal of the contract claim because while the Joneses had offered to purchase a boat slip for $10,000 by initialing the notation on the contract, there was no acceptance and therefore no mutual assent. Ms. *6. Also, the merger clause precluded the plaintiffs’ effort to establish an oral contract for the sale of a boat slip for $10,000. Ibid.

However, the court reversed the dismissal of the fraud in the inducement claim applying settled law that “renders an integration, or merger, clause ineffective to bar parol evidence of fraud in the inducement or procurement of a contract.” Ms. *7, quoting Environmental Sys., Inc. v. Rexom Corp., 624 So. 2d 1379, 1383 (Ala. 1983).

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