Markman, J.

We granted leave to appeal in this case to consider whether defendant breached the parties’ written contract by refusing to pay plaintiff retirement renewal commissions on insurance policies that plaintiff sold on behalf of defendant while plaintiff was working for defendant. The trial court denied defendant’s motion for summary disposition. It concluded that the contract was ambiguous and, thus, that its interpretation raised a question of fact that must be decided by the jury, which could consider relevant extrinsic evidence. The jury found in favor of plaintiff. The Court of Appeals reversed, concluding that the contract unambiguously stated that an agent must be at least sixty-five years old and have worked at least ten years for defendant in order to qualify for retirement renewal commissions and, therefore, that *461the trial court erred in not granting defendant’s motion for summary disposition. Because we agree with the trial court that the language of this contract is ambiguous and, thus, that its interpretation raises a question of fact for the jury to determine in light of relevant extrinsic evidence, we reverse the judgment of the Court of Appeals and remand this case to the Court of Appeals for consideration of defendant’s other appellate issue and plaintiff’s cross-appeal.1

I. FACTS AND PROCEDURAL HISTORY

When plaintiff began working as an insurance agent for defendant in 1990, they entered into a contract, titled the “Agent’s Agreement.” Plaintiff permanently stopped working for defendant in 1997.2 Plaintiff brought this action, alleging that defendant failed to pay renewal commissions to which plaintiff was entitled pursuant to the vesting schedule in their contract that provided that an agent with seven years of service is entitled to the vesting of one hundred percent *462of his renewals.3 After discovery, defendant brought a motion for summary disposition pursuant to MCR 2.116(C)(10), contending that, in order for renewal commissions to be vested on the basis of retirement, one must be at least sixty-five years old and have worked for defendant for at least ten years.4 The trial court denied defendant’s motion for summary disposition,5 finding the contract to be ambiguous,6 and the jury subsequently found in favor of plaintiff.7 The Court of Appeals then reversed, concluding that the contract unambiguously requires that an agent must be at least sixty-five years old and have worked at least ten years for defendant in order to qualify for retirement renewal commissions.8 We granted plain*463tiff’s application for leave to appeal.9

II. STANDARD OF REVIEW

We review de novo a trial court’s ruling on a motion for summary disposition. Stanton v Battle Creek, 466 Mich 611, 614; 647 NW2d 508 (2002). Similarly, whether contract language is ambiguous is a question of law that we review de novo. Farm Bureau Mut Ins Co v Nikkel, 460 Mich 558, 563; 596 NW2d 915 (1999). Finally, the proper interpretation of a contract is also a question of law that we review de novo. Henderson v State Farm Fire & Cas Co, 460 Mich 348, 353; 596 NW2d 190 (1999).

III. ANALYSIS

The Agent’s Agreement at issue here provides in relevant part: *464place, in such amounts as would otherwise have been payable to Agent, until the aggregate renewals payable to Agent thereon shall equal less than Forty-One Dollars and Sixty-Seven Cents ($41.67) per month. If upon the date of death, disability, or retirement, Agent shall have aggregated eight (8) or more years of service under this Agreement, his then vesting shall be determined in accordance with the normal vesting schedule.

*4635. Vested Commissions. Commissions shall be vested in the following manner:

(A) Death, disability, or retirement during term hereof. Upon the death, disability, or retirement (as those terms shall be then defined in the Agent’s Manual) of Agent at any time prior to the termination of this Agreement, Agent (or Agent’s designated death beneficiary who shall be designated by Agent in writing; or in the absence of such written designation, Agent’s estate) shall thereafter be entitled to receive one hundred percent (100%) of such renewal commissions then payable from premiums on Agent’s policies in

*464(B) Vesting Schedule. In the event of a termination of this Agreement for reasons of death, disability and retirement (as defined in the Agent’s Manual), Agent as set forth below on the date of execution hereof shall be entitled to receive a percentage of renewal commissions then payable from premiums on Agent’s policies in place, applicable to such amounts as would otherwise have been payable to Agent in accordance with the following vesting schedule:

Agent’s Years of Service % of Renewals Vested

Less than 2 years 0%

2 years 10%

3 years 30%

4 years 50%

5 years 70%

6 years 90%

7 years 100%

8 years 110%

9 years 120%

10 years 130%

11 years 140%

12 years 150%

With regard to retirement, the Agent’s Manual provides:

Retirement is understood to be disengagement from the insurance industry. Vestment for retirement is age 65 or 10 years of service whichever is later.

*465When defendant moved for summary disposition, it argued that plaintiff was not entitled to renewal commissions because, although plaintiff had disengaged from the insurance industry, he was not at least sixty-five years old and had not worked for defendant for at least ten years, whereas the contract unambiguously required an agent to satisfy all three of these requirements in order to be eligible for retirement renewal commissions. Defendant further argued that, because the contract was unambiguous, extrinsic evidence may not be considered in interpreting the contract.

Plaintiff, on the other hand, argued that the contract was ambiguous because the vesting schedule in § 5(B) of the Agent’s Agreement conflicts with the sixty-five years of age and ten years of service requirements in the Agent’s Manual. That is, under the vesting schedule, a percentage of renewal commissions were vested after two years of service, while, under the Agent’s Manual’s definition of retirement, which the Agent’s Agreement incorporated, renewal commissions were not vested at all until an agent reached sixty-five years of age and had served as an agent with defendant for ten years. Plaintiff further argued that, because this contract was ambiguous, its interpretation was a question of fact that must be decided by the jury in light of relevant extrinsic evidence. As already noted, the trial court agreed with plaintiff that the contract was ambiguous and, thus, must be interpreted by the jury in light of relevant extrinsic evidence.10

*466On appeal to the Court of Appeals, plaintiff argued that the early years of the vesting schedule (years two through nine) directly conflicted with the sixty-five years of age and ten years of service requirements, creating an ambiguity that the jury properly resolved against defendant. Defendant, on the other hand, argued that years two through nine of the vesting schedule should be ignored. The Court of Appeals, correctly recognizing that years two through nine of the vesting schedule had to be given some meaning, but disagreeing with plaintiff that they applied to agents who had retired, concluded that these years of the vesting schedule only applied to agents who died or had become disabled. Plaintiff filed a motion for rehearing, arguing that the Court of Appeals had overlooked § 5(A) of the Agent’s Agreement, which provided that, regardless of age or years of service, an agent who died or became disabled while still employed was entitled to receive one hundred percent of his renewal commissions. Therefore, plaintiff argued, the Court of Appeals erred in concluding that years two through nine of the vesting schedule applied to agents who died or became disabled. The Court of Appeals denied plaintiff’s motion for rehearing without explanation.

*467A. THE CONTRACT LANGUAGE IS AMBIGUOUS

“An insurance contract is ambiguous when its provisions are capable of conflicting interpretations.” Nikkei, supra at 566. Accordingly, if two provisions of the same contract irreconcilably conflict with each other, the language of the contract is ambiguous. Further, courts cannot simply ignore portions of a contract in order to avoid a finding of ambiguity or in order to declare an ambiguity. Instead, contracts must be “ ‘construed so as to give effect to every word or phrase as far as practicable.’ ” Hunter v Pearl Assurance Co, Ltd, 292 Mich 543, 545; 291 NW 58 (1940), quoting Mondou v Lincoln Mut Cas Co, 283 Mich 353, 358-359; 278 NW 94 (1938).

In our judgment, the vesting schedule found in § 5(B) of the Agent’s Agreement irreconcilably conflicts with the Agent’s Manual’s definition of retirement, which the Agent’s Agreement incorporates. Under the vesting schedule, an agent who has served two or more years with defendant is entitled to a percentage of renewal commissions; while, under the Agent’s Manual’s definition of retirement, an agent is only entitled to a percentage of renewal commissions if that agent is at least sixty-five years old and has served ten or more years with defendant. Accordingly, while plaintiff is entitled to renewal commissions under the vesting schedule, he is not entitled to renewal commissions under the Agent’s Manual’s definition of retirement. Therefore, the language of the contract is ambiguous.

The Court of Appeals attempted to avoid a finding of ambiguity by concluding that, if an agent has less than ten years of service with defendant, he cannot *468be considered retired and, thus, years two through nine of the vesting schedule would not apply to him; however, these years would apply to an agent who died or became disabled without reaching the age of sixty-five and without having ten years of service with defendant. Although the Court of Appeals is correct in recognizing that it must give some meaning to years two through nine of the vesting schedule, in its attempt to give these years some meaning, it has ignored another portion of the contract, that is, § 5(A) of the Agent’s Agreement. Just as “[c]ourts must give effect to every word, phrase, and clause in a statute and avoid an interpretation that would render any part of the statute surplusage or nugatory,” State Farm & Gas Co v Old Republic Ins Co, 466 Mich 142, 146; 644 NW2d 715 (2002), courts must also give effect to every word, phrase, and clause in a contract and avoid an interpretation that would render any part of the contract surplusage or nugatory.

Section 5(A) of the Agent’s Agreement provides that an agent who dies or becomes disabled is automatically one hundred percent vested. Therefore, contrary to the contention of the Court of Appeals, years two through nine of the vesting schedule, which provide for less than one hundred percent vesting, would have no application to an agent who dies or becomes disabled. If the contract is read, as the Court of Appeals read it, to require an agent to be at least sixty-five years old and to have served as an agent for defendant for at least ten years to be considered retired, years two through nine of the vesting scheduled are rendered meaningless. Because there is no way to read the provisions of this contract in reason*469able harmony, the language of the contract is ambiguous.

B. INTERPRETATION OF AMBIGUOUS CONTRACT

It is well settled that the meaning of an ambiguous contract is a question of fact that must be decided by the jury. Hewett Grocery Co v Biddle Purchasing Co, 289 Mich 225, 236; 286 NW 221 (1939). “ ‘Where a contract is to be construed by its terms alone, it is the duty of the court to interpret it; but where its meaning is obscure and its construction depends upon other and extrinsic facts in connection with what is written, the question of interpretation should be submitted to the jury, under proper instructions.’ ” O’Connor v March Automatic Irrigation Co, 242 Mich 204, 210; 242 NW 784 (1928) (citation omitted).

Where a written contract is ambiguous, a factual question is presented as to the meaning of its provisions, requiring a factual determination as to the intent of the parties in entering the contract. Thus, the fact finder must interpret the contract’s terms, in light of the apparent purpose of the contract as a whole, the rules of contract construction, and extrinsic evidence of intent and meaning. [11 Williston, Contracts (4th ed), § 30:7, pp 87-91.]

In resolving such a question of fact, i.e., the interpretation of a contract whose language is ambiguous, the jury is to consider relevant extrinsic evidence. As this Court explained in Penzien v Dielectric Products Engineering Co, Inc, 374 Mich 444, 449; 132 NW2d 130 (1965):

“If the contract in question were ambiguous or ‘doubtful,’ extrinsic evidence, particularly evidence which would indicate the contemporaneous understanding of the parties, *470would be admissible as an aid in construction of the disputed terms.”

“The law is clear that where the language of the contract is ambiguous, the court can look to such extrinsic evidence as the parties’ conduct, the statements of its representatives, and past practice to aid in interpretation.” [Citations omitted.]

Looking at relevant extrinsic evidence to aid in the interpretation of a contract whose language is ambiguous does not violate the parol evidence rule.

“The parol evidence rule does not preclude the admission • of parol or extrinsic evidence for the purpose of aiding in the interpretation or construction of a written instrument, where the language of the instrument itself taken alone is such that it does not clearly express the intention of the parties or the subject of the agreement. Such evidence is admitted not to add to or detract from the writing, but merely to ascertain what the meaning of the parties is. Thus a written instrument is open to explanation by parol or extrinsic evidence when it is expressed in short and incomplete terms, or is fairly susceptible of two constructions, or where the language employed is vague, uncertain, obscure, or ambiguous, and where the words of the contract must be applied to facts ascertainable only by extrinsic evidence, a resort to such evidence is necessarily permitted.” [Edoff v Hecht, 270 Mich 689, 695-696; 260 NW 93 (1935) (citation omitted).]

In interpreting a contract whose language is ambiguous, the jury should also consider that ambiguities are to be construed against the drafter of the contract.11 Herweyer v Clark Hwy Services, Inc, 455 Mich *47114, 22; 564 NW2d 857 (1997).12 This is known as the rule of contra proferentem. However, this rule is only to be applied if all conventional means of contract interpretation, including the consideration of relevant extrinsic evidence, have left the jury unable to determine what the parties intended their contract to mean.13 Accordingly, if the extrinsic evidence indicates that the parties intended their contract to have a particular meaning, this is the meaning that should be given to the contract, regardless of whether this meaning is in accord with the drafter’s or the non-drafter’s view of the contract. In other words, if a contract is ambiguous regarding whether a term means “a” or “b,” but relevant extrinsic evidence leads the jury to conclude that the parties intended the term to mean “b,” then the term should be interpreted to mean “b,” even though construing the document in the nondrafter’s favor pursuant to an applica*472tion of the rule of contra proferentem would produce an interpretation of the term as “a.”

However, if the language of a contract is ambiguous, and the jury remains unable to determine what the parties intended after considering all relevant extrinsic evidence, the jury should only then find in favor of the nondrafter of the contract pursuant to the rule of contra proferentem. In other words, the rule of contra proferentem should be viewed essentially as a “tie-breaker,” to be utilized only after all conventional means of contract interpretation, including the consideration of relevant extrinsic evidence, have been applied and found wanting.

This view of the rule of construing against the drafter of the contract is in accordance with 2 Restatement Contracts, 2d, § 206, p 105, which provides:

In choosing among the reasonable meanings of a promise or agreement or a term thereof, that meaning is generally preferred which operates against the party who supplies the words or from whom a writing otherwise proceeds.

The comments following this rule state that “[i]n cases of doubt, therefore, so long as other factors are not decisive, there is substantial reason for preferring the meaning of the other party. . . .” Id. “[T]he rule is ‘the last one to be resorted to, and never to be applied except when other rules of interpretation fail.’ ” Id., Reporter’s Note, p 106, citation omitted. Treatises also indicate that this is a so-called “rule of last resort.” For example, 5 Corbin, Contracts (rev ed, 1998), § 24.27, pp 297-300, provides:

The “contra proferentem” rule has been described as being applicable only as a last resort, when other tech*473ñiques of interpretation and construction have not resolved the question of which of two or more possible reasonable meanings the court should choose. One court wrote that it is “a tie breaker when there is no other sound basis for choosing one contract interpretation over another.” . . . Another federal court expressed a similar reservation concerning use of the rule: “[T]his rule of construction should not be enlarged to [clarify] perfunctorily ... an ambiguous meaning; the trier of fact should still consider the drafting party’s evidence.” The “contra proferentem” rule thus yields to other techniques of interpretation, including the attempt to give a valid, legal, and reasonable meaning to as many of the contract terms as possible. [Citations omitted.]

In addition, Williston, supra, § 32:12, pp 480-482, provides:

The rule of contra proferentem is generally said to be a rule of last resort and is applied only where other secondary rules of interpretation have failed to elucidate the contract’s meaning. . . . Finally, the rule does not justify a court in adopting an interpretation contrary to that asserted by the drafter, simply because of his or her status as the drafter. Rather, it is only when consistent with the rules of contract interpretation, the meaning proposed by the non-drafter (or an altogether different meaning determined by the court) is reasonable — -when there is a true ambiguity and the court must choose between two or more reasonable meanings — that the rule of contra proferentem is properly invoked.

The rule of contra proferentem is a rule of last resort because, “The primary goal in the construction or interpretation of any contract is to honor the intent of the parties,” Rasheed v Chrysler Corp, 445 Mich 109, 127 n 28; 517 NW2d 19 (1994), and the rule of contra proferentem does not aid in determining the parties’ intent. Instead, the comments after the restatement refer to the rule of contra proferentem, *474not as a rule of interpretation, but as “a rule of legal effect.” 2 Restatement, supra at 105. It is a rule of legal effect, rather than a rule of legal interpretation, because its purpose is not to render more accurate or more perfect a jury’s understanding of the meaning of the contract, but is merely to ascertain the winner and the loser in connection with a contract whose meaning has eluded the jury despite all efforts to apply conventional rules of interpretation. As stated in Corbin, supra, p 306:

The rule is not actually one of interpretation, because its application does not assist in determining the meaning that the two parties gave to the words, or even the meaning that a reasonable person would have assigned to the language used. It is chiefly a rule of policy, generally favoring the underdog. It directs the court to choose between two or more possible reasonable meanings on the basis of their legal operation, i.e., whether they favor the drafter or the other party.

In sum, the jury can consider relevant extrinsic evidence as an aid in interpreting a contract whose language is ambiguous. However, if, after the jury has applied all other conventional means of contract interpretation and considered the relevant extrinsic evidence, the jury is still unable to determine what the parties intended, the jury should then construe the ambiguity against the drafter. That is, the rule of contra proferentem is only to be applied if the intent of the parties cannot be discerned through the use of all conventional rules of interpretation, including an examination of relevant extrinsic evidence.

The concurring opinion asserts that, “when a contract is drafted entirely by one party, without any bilateral negotiations,” the rule of contra proferentem *475“should be applied as the primary rule of construction, not as a last resort . . . Post at 482, 483. That is, when a contract whose language is ambiguous is drafted without bilateral negotiations, a jury should not be allowed to look at relevant extrinsic evidence in order to discern the parties’ intent. Instead, the ambiguous language is simply to be construed against the drafter.

We respectfully disagree with the concurring opinion’s reference to the rule of contra proferentem as a “rule of construction.” In our judgment, the rule of contra proferentem is not a rule of construction, rather, as explained above, it is a rule of legal effect. See pp 473-474. While rules of construction are designed to help determine the parties’ intent, the rule of contra proferentem is designed to resolve a dispute where the parties’ intent cannot be determined.

Further, as the concurring opinion correctly states, “[t]he ultimate objective in interpreting an ambiguous contract is to ascertain the intent of the parties . . . .” Post at 483. Therefore, in our judgment, it is only obvious that a method of construing a contract that helps ascertain the intent of the parties should be preferred over one that does not.14 We agree with the *476concurring opinion that extrinsic evidence “ ‘provides an incomplete guide with which to interpret contractual language.’ ” Post at 483. That is, extrinsic evidence is not the best way to determine what the parties intended. Rather, the language of the parties’ contract is the best way to determine what the parties intended. However, where, as in cases such as this one, it is not possible to determine the parties’ intent from the language of their contract, the next best way to determine the parties’ intent is to use relevant extrinsic evidence. Such evidence at least affords a way by which to ascertain the parties’ intent, unlike the rule of contra proferentem, which focuses solely on the status of the parties to a contract.15

Finally, we disagree with the concurring opinion’s contention that “this Court has consistently applied the rule of construing against the drafter as the primary tool of construction . . . .” Id. at 485. Not one of the cases cited in the concurring opinion, in fact, concludes that relevant extrinsic evidence is inadmissible to help a jury determine the parties’ intent where the language of a contract is ambiguous. In other words, not a single one of these cases concludes that the rule of contra proferentem is somehow a “primary rule of construction.” Instead, in each of these cases, the rule of contra proferentem was, in all likelihood, applied because there was no way to determine the *477parties’ intent. That is, the language of the contract was ambiguous, but there was no relevant extrinsic evidence available.16 Therefore, the concurring opinion’s reliance on these cases is misplaced.17

In this case, plaintiff introduced as extrinsic evidence an older version of the Agent’s Agreement and deposition testimony from defendant’s executives showing that defendant’s past practice had been to pay former agents the renewal commissions specified by § 5(B) of the vesting schedule, regardless of whether those agents had ten years of service with defendant or had reached age sixty-five.

Plaintiff argues that the definition of retirement under the contract is simply “disengagement from the insurance industry” and that the second sentence under the section defining retirement in the Agent’s Manual was unintentionally left over from a time before defendant’s Agent’s Agreement contained a *478vesting schedule. Not only does this construction of the contract accord meaning to the entire vesting schedule, but it is also the construction that defendant itself has applied for the past eight years, that is, since it adopted the new Agent’s Agreement containing the vesting schedule.18 In other words, defendant had been paying the specified percentages of renewal commissions to agents, who were not sixty-five years of age and had not worked for defendant for at least ten years, as long as they had disengaged from the insurance industry.19

Defendant argues that the jury should not have considered this extrinsic evidence. However, as discussed above, the jury is to consider relevant extrinsic evidence when interpreting a contract whose language is ambiguous. How the drafting party has interpreted ambiguous contractual language in the past is certainly relevant in determining what the parties intended such language to mean. The meaning of a provision in a contract whose language is ambiguous “must be ascertained in the light of all of the relevant circumstances, . . . including, . . . the meanings accepted by the parties.” Davis v Kramer Bros Freight Lines, Inc, 361 Mich 371, 375; 105 NW2d 29 (1960). “There is no doubt that evidence of practical interpretation by the parties is admissible as an aid in the determination of the meaning to be given legal effect.” Id. at 375-376.

*479Where parties by such a uniform course of conduct for a long time have given a contract a particular construction, that construction will be adopted by the courts.

“The practical interpretation given to contracts by the parties to them, while engaged in their performance and before any controversy has arisen concerning them, is one of the best indications of their true intent.” [People ex rel Attorney General v Michigan Central R Co, 145 Mich 140, 166; 108 NW 772 (1906) (citation omitted) (portion of dissent by Grant, J., assented to by the majority at 150).]

Because the language of the contract here is ambiguous, and because defendant had, in the past, construed this contract to require the payment of retirement renewal commissions according to the vesting schedule, even if the agent was not at least sixty-five years old and had not served as an agent with defendant for at least ten years, the trial court did not err in instructing the jury to consider this evidence.

Although the trial court correctly instructed the jury that it could consider relevant extrinsic evidence and that any ambiguities should be construed against the drafter pursuant to the rule of contra proferentem, the trial court failed to inform the jury that it could only apply the rule of contra proferentem if it was unable to discern the parties’ intent from the extrinsic evidence. However, in this case, this error was harmless. The jury did one of two things here. The jury either construed the language of the contract in favor of plaintiff pursuant to the rule of contra proferentem, or it construed the language of the contract in favor of plaintiff because the extrinsic evidence pointed to a construction of the contract in *480plaintiffs favor.20 Accordingly, regardless of which approach the jury used, it reached the (same) right result and, thus, failure to reverse is not inconsistent with substantial justice. MCR 2.613(A); Cox v Flint Bd of Hosp Managers, 467 Mich 1, 8; 651 NW2d 356 (2002).21

IV. CONCLUSION

If two provisions of the same contract irreconcilably conflict with each other, the language of the contract is ambiguous. In this case, the contract’s definition of retirement irreconcilably conflicts with the contract’s vesting schedule. Under the contract’s definition of retirement, plaintiff is not entitled to renewal commissions; while, under the vesting schedule, plaintiff is entitled to renewal commissions. Accordingly, the contract language at issue here is ambiguous.

The interpretation of a contract whose language is ambiguous is a question of fact for the jury to decide. When interpreting a contract whose language is ambiguous, the jury is to consider relevant extrinsic evidence. That the drafting party interpreted the ambiguous contractual language in a certain way for many years is relevant extrinsic evidence.

In interpreting a contract whose language is ambiguous and in which the parties’ intent cannot other*481wise be determined through resort to relevant extrinsic evidence, the jury should construe any ambiguities against the drafter of the contract. That is, if, after the jury has considered all conventional means of contract interpretation and all relevant extrinsic evidence, it is still unable to determine what the parties intended, the jury should then construe the ambiguity against the drafter.

Therefore, we conclude that the trial court here did not err in instructing the jury that it should consider relevant extrinsic evidence in order to discern the parties’ intent, and that it should also construe any ambiguities against the drafter. Although the trial court did err in failing to inform the jury that it should only construe ambiguities against the drafter if it cannot discern the parties’ intent from the relevant extrinsic evidence, this error was harmless. Accordingly, we reverse the judgment of the Court of Appeals and remand this case to the Court of Appeals for consideration of defendant’s other appellate issue and plaintiff’s cross-appeal.

Corrigan, C.J., and Taylor and Young, JJ., concurred with Markman, J.

Cavanagh, J., concurred in the result only.

Weaver, J.

I concur in the decision to reverse the judgment of the Court of Appeals and remand the case to that Court for consideration of issues raised, but not addressed, below. I write separately because I disagree with the majority’s holding that “the rule of contra proferentem is only to be applied if the intent of the parties cannot be discerned through the use of all conventional rules of interpretation, including an examination of relevant extrinsic evidence.” Ante at *482474. Although I agree that this is the general rule, I would hold that when a contract is drafted entirely by one party, without any bilateral negotiations, the rule that a contract is to be strictly construed against its drafter should be applied as the primary rule of construction, not as a last resort, and extrinsic evidence is not admissible to clarify ambiguity in the contract.

The doctrine of contra proferentem, under which a contract that is ambiguous will be construed against the party preparing it, is a well-established rule. See, e.g., Universal Underwriters Ins Co v Kneeland, 464 Mich 491, 498; 628 NW2d 491 (2001) (discussing the “rule requiring that contractual ambiguities be construed against the drafter”); Herweyer v Clark Hwy Services, Inc, 455 Mich 14, 22; 564 NW2d 857 (1997) (“As the contract period under consideration is ambiguous, it must be construed against the drafter.”). In general, it is a rule of last resort, to be applied only if the intent of the parties cannot be discerned by the use of other rules of interpretation. See 2 Farnsworth, Contracts (2d ed), ch 7 §7.11, and 5 Corbin, Contracts (rev ed, 1998), § 24.27, pp 297-300.

The questions we asked the parties to address1 are whether extrinsic evidence should be precluded and whether the rule of construing against the drafter should be applied initially, instead of as a rule of last resort, when the contract is drafted entirely by one *483party without bilateral negotiation. I conclude that in such a case, the rule of contra proferentem should be applied as the primary rule of construction, not as a last resort, and that extrinsic evidence is not admissible to clarify the ambiguity.

The ultimate objective in interpreting an ambiguous contract is to ascertain the intent of the parties so the agreement can be carried out according to that intent. Loyal Order of Moose, Adrian 1034 v Faulhaber, 327 Mich 244, 250; 41 NW2d 535 (1950); Stine v Continental Cas Co, 419 Mich 89, 112; 349 NW2d 127 (1984). When there are bilateral negotiations between the parties, a court can assume that there is a relation between the contract terms that were agreed upon and the parties’ expectations as revealed by extrinsic evidence. However, “unless extrinsic evidence can speak to the intent of all parties to a contract, it provides an incomplete guide with which to inteipret contractual language.” SI Mgt LP v Wininger, 707 A2d 37, 43 (Del, 1998) (emphasis in original).

The Supreme Court of Delaware has held that where ambiguity arises in a contract drafted solely by one side and offered to others on a take-it-or-leave-it basis, the rule of construing against the drafter is determinative. SI Mgt, supra; followed by Intel Corp v Via Technologies, Inc, 174 F Supp 2d 1038 (ND Cal, 2001). In SI Mgt the Delaware court analyzed its approach to interpreting insurance contracts. The Delaware courts had said that if an insurance contract is ambiguous, “ ‘the principle of contra proferentem dictates that the contract must be construed against the drafter.’ ” SI Management, supra at 42 (citation omitted). The court found that the policy behind that principle of construing against the drafter *484is that the insurer was in complete control of creating and drafting the policy, while the insured had little say about those terms except to take them or leave them or to select from limited terms offered by the insurer. Because of that, the Delaware courts had consistently held that the insurer had an obligation to make the terms clear and should suffer the consequences of convoluted or confusing terms. In SI Mgt the Delaware Supreme Court expanded this principle to other contracts where there was not a bilaterally negotiated agreement, and one party had signed onto an agreement that it had no hand in drafting.

There are sound public-policy reasons behind a black letter rule that when contractual provision are drafted entirely by one party, any ambiguity in the contract is to be construed against the drafter. First, the rule of contra proferentem provides a strong incentive for a party drafting a contract to use clear and unambiguous language. Second, the use of extrinsic evidence in circumstances involving ambiguity could be destabilizing to contractual relations and require more involved litigation by allowing parties to use assertions of oral understandings and examples of past behavior rather than relying on a written contract with the understanding that any ambiguity should be construed against its drafter.

This Court has not previously addressed whether the rule of construing against the drafter should be used as a primary rule of construction in ambiguous contracts or only used after considering any extrinsic evidence available.2 However, in interpreting ambigu*485ous contracts, this Court has consistently applied the rule of construing against the drafter as its primary, indeed sole, aid to construction. See Herweyer, supra at 22 (“As the contract period under consideration is ambiguous, it must be construed against the drafter, the defendant.”), Lichnovsky v Ziebart Int’l Corp, 414 Mich 228, 239; 324 NW2d 732 (1982) (“Any ambiguity in the expression must be construed against Ziebart, as its predecessor drafted the agreement.”), Ladd v Teichman, 359 Mich 587, 592; 103 NW2d 338 (1960) (“We agree with appellees that appellant having drafted the contract, any ambiguity contained in it must be construed against him.”), and Veenstra v Associated Broadcasting Corp, 321 Mich 679, 691; 33 NW2d 115 (1948) (“Defendants caused the drafting of the two contracts and any doubt or ambiguity concerning the nature of the contracts must be resolved against the defendants.”).

Similarly, this Court has consistently applied the rule of construing against the drafter as the primary tool of construction in insurance contracts. In insurance contracts, one party decides the terms of the contract, drafts the contract, and presents it to the other party in a take-it-or-leave-it fashion, all with no bilateral negotiation. Michigan Millers Mut Ins Co v Bronson Plating Co, 445 Mich 558, 567; 519 NW2d 864 (1994) (in interpreting insurance cases, a well-established principle of construction is, “Where ambiguity is found, the court must construe the term in *486the manner most favorable to the insured.”). See also State Farm Mut Automobile Ins Co v Enterprise Leasing Co, 452 Mich 25, 38; 549 NW2d 345 (1996) (“[b]ecause State Farm prepared the form insurance contracts, any ambiguity must be strictly construed against it.”), Raska v Farm Bureau Mut Ins Co of Michigan, 412 Mich 355, 362; 314 NW2d 440 (1982) (“If a fair reading of the entire contract of insurance leads one to understand that there is coverage under particular circumstances and another fair reading of it leads one to understand that there is no coverage under the same circumstances the contract is ambiguous and should be construed against its drafter and in favor of coverage.”), and Bonney v Citizens’ Mut Automobile Ins Co, 333 Mich 435, 438; 53 NW2d 321 (1952) (“An ambiguous contract must be construed against the party who prepared it.”).3

I would hold that this principle should be extended beyond insurance contracts and applied to other contracts in which there is a similar disparity of control in the creation of the terms of the contract. Here defendant was the entity in sole control of the process of creating and setting forth the terms of the contract. The parties did not engage in bilateral negotiation; the plaintiffs only choice in the terms of the contract was to take them or leave them. In such a *487situation, any ambiguity in the contract should have been construed against the drafter, without considering the extrinsic evidence.

In this case, the trial judge allowed the plaintiff to introduce a variety of extrinsic evidence, including references to the older version of the Agent’s Agreement4 and deposition testimony by the defendant’s executives.5 I would hold that the trial court erred in admitting the extrinsic evidence to resolve the contract’s ambiguity. However, that error was harmless, because the same result was achieved as would have been if the contract had been construed against its drafter, defendant.

Accordingly, I concur with the decision to reverse the judgment of the Court of Appeals and remand the case to that Court for consideration of those issues raised, but not addressed, below.

Kelly, J., concurred with Weaver, J.

Locke, Jeffrey A., J.

INTRODUCTION

Plaintiff White City Shopping Center, LP (“White City”) brought this declaratory judgment action against defendant PR Restaurants, LLC (“PR”) seeking a declaration that it is not in breach of its commercial lease with PR. PR counterclaimed against White City for breach of contract, breach of implied covenant of good faith and fair dealing, and violation of G.L.c. 93A. PR now moves for a preliminary injunction, seeking to enjoin White City, its partners, employees or agents, from taking any action which would violate the exclusive use provision of its commercial lease with White City. Such actions include White City taking any action that would permit Chair 5 Restaurants, (“Chair *5665”), the intervening party, from operating a Qdoba restaurant at the White City Shopping Center (“Shopping Center”). For the following reasons, the defendant’s motion is DENIED.

BACKGROUND

Defendant, PR is a Massachusetts limited liability company that operates 22 Panera Bread (“Panera”) restaurants in the New England area. Panera is a café-style restaurant chain that sells sandwiches, coffee, and soup. Mitchell J. Roberts is the manager of PR PR is a tenant under a commercial lease for approximately 4,469 square feet of retail space in the Shopping Center located on Route 9, in Shrewsbury. White City, a limited partnership, is the landlord of the Shopping Center. Chair 5, the intervening party, is a Delaware limited liability company and franchisee of Qdoba, a Mexican-style restaurant chain that sells burritos, quesadillas, and tacos. Both Panera and Qdoba compete in the same “fast-casual" restaurant market.1

On March 14, 2001, White City entered into a ten-year lease (“the Lease”) with PR for retail space to operate a Panera restaurant in the Shopping Center. Lease negotiations lasted several months partly because of PR’s request to include an exclusivity clause in the Lease. PR authored the clause which underwent three revisions prior to the Lease’s execution. The exclusivity clause that both parties initially agreed to restricted White City from entering into new leases with businesses that primarily sell sandwiches. In its first iteration, Section 4.07 of the Lease states, in relevant part:

Landlord agrees not to enter into a lease, occupancy agreement or license affecting space in the Shopping Center or consent to an amendment to an existing lease permitting use . . . for a bakery or restaurant reasonably expected to have annual sales of sandwiches greater than ten percent (10%) of its total sales or primarily for the sale of high quality coffees or teas, such as, but not limited to, Starbucks, Tea-Luxe, Pete’s Coffee and Tea, and Finagle a Bagle . . . The foregoing shall not apply to (i) the use of the existing, vacant free-standing building in the Shopping Center for a Dunkin Donuts-type business, or for a business serving near-Eastern food and related products, (ii) restaurants primarily for sit-down table service, (iii) a Jewish delicatessen or (iv) a KFC restaurant operating in a new building following the demolition of the existing, freestanding building. No new building shall violate the no-build provision of this Lease.

Lease §4.07 (emphasis supplied).

The Lease contained no definition of “sandwiches” or “near-Eastern” food.2 During lease negotiations, PR and White City did not discuss the definition of “sandwiches” or the type of food products they intended the term to cover. Furthermore, the parties never indicated, specified, or agreed that the term “sandwiches” included tacos, burritos, and quesadillas.

Following the Lease’s execution in March, the parties amended the exclusivity clause to include additional restrictions. On December 30, 2005, Section 4.07 of the Lease was amended, as follows:

The foregoing restriction shall also apply (without limitation) to a Dunkin Donuts location and to a Jewish-style delicatessen within the Shopping Center, but shall not apply to (i) use of the existing, freestanding building in the Shopping Center partially occupied by Strawberries and recently expanded for a business serving near-eastern food and related products, (ii) restaurants for primarily for sit down table service or (iii) a Papa Gino’s restaurant (provided the same continues to operate with substantially the same categories of menu items as now apply to its stores and franchisees generally).

Lease §4.07.

Sometime after the amendment, PR learned that White City had entered into discussions with Chair 5 to lease commercial space. Chair 5 planned to develop and construct a Qdoba restaurant in the same Shopping Center as Panera. After learning of the parties’ plans, PR had its attorney contact White City to express concern and seek an assurance that White City would not enter into a lease with Chair 5. PR believed that White City’s leasing of space to Chair 5 violated Section 4.07 of the Lease. Specifically, PR believed, and later asserted that tacos, burritos, and quesadillas fell within meaning of “sandwiches” and therefore, White City was prohibited from leasing to Chair 5 under the Lease. White City refused to provide the requested assurance when PR’s attorney contacted it about the pending Chair 5 lease. On or around August 22, 2006, White City executed a lease with Chair 5 for 2,100 square feet of retail space in the Shopping Center. On September 28, 2006, White City filed an action against PR, seeking a declaratory judgment that it did not breach its lease with PR.

Since the execution of the Chair 5 lease, Chair 5 has spent over $85,000 in planning costs, and it is further contractually obligated to spend over $300,000 for the construction of a Qdoba restaurant in the Shopping Center. According to Chair 5, it has yet to schedule an opening date for its restaurant.

DISCUSSION

Under the well-established test of Packaging Industries Group v. Cheney, 380 Mass. 609, 617 (1980), a preliminary injunction is warranted only when the moving party establishes both a likelihood of success on the merits of the claim, and a substantial risk of irreparable harm in the absence of an injunction. Once these factors are established, the Court must balance them against the harm that an injunction will inflict on the opposing party, and must also consider the impact on the public interest. See T&D Video, Inc. v. City of Revere, 423 Mass. 577, 580 (1996).

*567A.Likelihood of Success on the Merits

To demonstrate a likelihood of success on the merits, PR must establish as a reasonable interpretation that the Mexican-style food products which Qdoba sells fall within the Lease’s restrictions. Absent an explicit and broad definition of “sandwiches” in the Lease itself, PR has not shown a likelihood of success to establish a right to injunctive relief under relevant contract principles.

The interpretation of a contract is question of law for the court. Sarvis v. Cooper, 40 Mass.App.Ct. 471, 475 (1996). A contract is construed to be given reasonable effect to each of its provisions. Id. “The object of the court is to construe the contract as a whole in a reasonable and practical way, consistent with its language, background and purpose.” USM Corp. v. Arthur D. Little Systems, Inc., 28 Mass.App.Ct. 108, 166 (1989). The starting point must be the actual words chosen by the parties to express their agreement. Id. If the words of the contract are plain and free from ambiguity, they must be construed in accordance with their ordinary and usual sense. See Ober v. National Casualty Co., 318 Mass. 27, 39 (1945).

Given that the term “sandwiches” is not ambiguous and the Lease does not provide a definition of it, this court applies the ordinary meaning of the word.3 The New Webster Third International Dictionary describes a “sandwich” as “two thin pieces of bread, usually buttered, with a thin layer (as of meat, cheese, or savory mixture) spread between them." Merriam-Webster, 2002. Under this definition and as dictated by common sense, this court finds that the term “sandwich” is not commonly understood to include burritos, tacos, and quesadillas, which are typically made with a single tortilla and stuffed with a choice filling of meat, rice, and beans. As such, there is no viable legal basis for barring White City from leasing to Chair 5.4 Further, PR has not proffered any evidence that the parties intended the term “sandwiches” to include burritos, tacos, and quesadillas. As the drafter of the exclusivity clause, PR did not include a definition of “sandwiches” in the lease nor communicate clearly to White City during lease negotiations that it intended to treat burritos, tacos, quesadillas, and sandwiches the same. Another factor weighing against PR’s favor is that it was aware that Mexican-style restaurants near the Shopping Center existed which sold burritos, tacos, and quesadillas prior to the execution of the Lease yet, PR made no attempt to define, discuss, and clarify the parties’ understanding of the term “sandwiches.” Accordingly, based on the record before the court, PR has not shown a likelihood of success on the merits.

B.Irreparable Harm

Irreparable harm occurs when a loss of rights cannot be remedied even though the party seeking an injunction prevails after a full hearing on the merits. Planned Parenthood League of Massachusetts, Inc. v. Operation Rescue, 406 Mass. 701, 710 (1990). Economic loss alone, however, does not usually rise to the level of irreparable harm which a party must establish to obtain a preliminary injunction. See Hull Mun. Lighting Plant v. Mass. Mun. Wholesale Elec., 399 Mass. 640, 643 (1987).

Here, PR has alleged irreparable harm on the basis that money damages will be difficult to quantify. However, this allegation is unsupported by any data showing that the profitability of Panera will disappear once Qdoba opens. Absent a showing by PR that Panera’s survival is dependent upon enjoining the opening of Qdoba and where both parties sell distinct and different food products, preliminary injunctive relief is inappropriate.

C.Balance of the Harms

This court further finds that the potential harm to the plaintiffs is outweighed by the harm to the defendant where plaintiffs have expended considerable time and money to plan and develop a Qdoba restaurant at the Shopping Center, in light of the fact that this court finds that White City did not breach its lease with PR. Even though PR vigorously argues for a broad definition of “sandwiches” under Section 4.07 to include food products sold by Qdoba, this argument does not change the fact that burritos, quesadillas, and tacos are not commonly understood to mean “sandwiches.” Because PR failed to use more specific language or definitions for “sandwiches” in the Lease, it is bound to the language and the common meaning attributable to “sandwiches” that the parties agreed upon when the Lease was drafted.

Having heard the parties and reviewing their filings, this court is not convinced that defendant, PR has carried its burden in showing a likelihood of success on the merits; that it will suffer irreparable harm if the injunctive relief sought is not granted; or that its harm, without the injunction, outweighs any harm to plaintiffs from being enjoined in the operation of its restaurant.

ORDER

For the foregoing reasons stated, it is hereby ORDERED that the Defendant’s motion for preliminary injunction be DENIED.

Frank Holt, Justice.

The appellant and appellee are subcontractors who entered into an agreement involving the installation of sewer lines. Paragraph 7 of the agreement between these parties provided:

It is further agreed that the 2nd subco tractor will *622receive $20,000 for supervision which will be added to the actual cost figure. It is further agreed that the difference between actual cost and bid price will be divided as follows: 33 1/3% to 2nd contractor; 66 2/3% to 1st subcontractor.

Appellee was paid $517,451.11 and appellee brought suit for an alleged payment deficit of $55,243.20 on the contract. The trial court, sitting as a jury, after hearing parol evidence, awarded appellee judgment for $40,349.11. Appellant questions only that part of the judgment which awarded $18,-600 (in addition to $20,000 for supervision) for the salary and living expenses of appellee’s president and sole stockholder during the time he was personally engaged in the supervision of the construction. Appellant contends that the extra award of $18,600 is double recovery in that it is contrary to the terms of the contract which designates a specific sum of $20,000 for supervision.

When contracting parties express their intention in a written instrument in clear and unambiguous language, it is our duty to construe the written agreement according to the plain meaning of the language employed. Miller v. Dyer, 243 Ark. 981, 423 S.W. 2d 275 (1968). However, where the meaning of a written contract is ambiguous, parol evidence is admissible to explain the writing, Brown and Hackney v. Daubs, 139 Ark. 53, 213 S.W. 4 (1919). Ambiguities are both patent and latent. When, on its face, the reader can tell that something must be added to the written contract to determine the parties’ intent, the ambiguity is patent; a latent ambiguity arises from undisclosed facts or uncertainty of the written instrument. Dorr v. School District No. 26 &c, 40 Ark. 237 (1882); Johnson v. Mo. Pac. R. R. Co., 139 Ark. 507, 214 S.W. 17 (1919); and Taylor v. Union Sawmill Co., 105 Ark. 518, 152 S.W. 150 (1912). However, the initial determination of the existence of an ambiguity rests with the court and if ambiguity exists, then parol evidence is admissible and the meaning of the term becomes a question for the factfinder. Fort Smith Appliance and Service Co. v. Smith, 218 Ark. 411, 236 S.W. 2d 583 (1951); Brown and Hackney v. Daubs, supra; and Easton v. Washington County Insurance Co., 391 Pa. 28, 137 A. 2d 332 (1957), cited in 4 Williston on Contracts, § 627 (3d. Ed. 1961). For example, in Taylor v. Union Sawmill Co., supra, our court made an initial determination of the ambiguous nature of the term “white oak” before justifying the introduction of testimony of custom and usage in order to determine the sense in which the term was employed.

*623In the case at bar, we cannot strain the plain, obvious, and unambiguous language of the contract. Appellee agreed to a definite amount for supervision. Had appellee’s president and sole owner of the corporation desired that the sum of $20,000 represent a guaranteed profit, as he and his witnesses so understood from their verbal agreement during negotiations, the wording of the contract should have so indicated. Had appellee’s president and owner intended, as he now contends was their verbal understanding, that his salary should be in addition to the $20,000 for supervision, the written contract could easily have so reflected. The lower court’s award for salary ($15,500) is contrary to the plain and unambiguous terms of their written agreement and the judgment should be adjusted accordingly".

In Hoffman v. Late, 222 Ark. 395, 260 S.W. 2d 446 (1953), we said:

It is the accepted present-day view that the parol evidence rule is not really a rule of evidence but is instead a rule of substantive law. Wigmore on Evidence (3d. Ed.), § 2400; Williston on Contracts (Rev. Ed.), § 631; Rest., Contracts, § 237; 4 Ark. L. Rev. 168. As Wigmore puts it, supra: ‘What the rule does is to declare that certain kinds of facts are legally ineffective in the substantive law; and this of course (like any other ruling of substantive law) results in forbidding the fact to be proved at all.’ The practical justification for the rule lies in the stability that it gives to written contracts; for otherwise either party might avoid his obligation by testifying that a contemporaneous oral agreement released him from the duties that he had simultaneously assumed in writing.

Hence in the case at bar it makes no difference whether Late’s version of the oral negotiations is true or false. . . .

Likewise, in the case at bar, even though the verbal evidence and tentative drafts attending the negotiations be true, it cannot alter the terms of the clearly unambiguous written agreement as to his compensation for supervisory services. The contracting parties were knowledgeable and certainly capable of reducing their negotiations to unambiguous written terms. In such situations, we cannot interfere.

The court found that appellee was entitled to $3,100 for its owner’s expenses during the time he actually was “on the job.” The contract clearly provides for recovery of actual *624costs. In the circumstances, the court was justified in this award.

We deem it unnecessary to discuss appellant’s other contentions.

The judgment is modified to exclude the salary allowance.

Affirmed as modified.

Fogleman and Brown, JJ., dissent.

John A. Fogleman, Justice,

dissenting. The majority opinion is apparently based upon the premise that the existence of ambiguity must be determined by the court upon the basis of an examination of the contract. This is the case in determining whether there is a patent ambiguity. It is not in the case of a latent ambiguity. By definition, a latent ambiguity is one which does not appear upon the face of the instrument and cannot be detected by examination of the document. It arises from facts not disclosed in the instrument. Dorr v. School District No. 26, 40 Ark. 237. Latent ambiguity is defined at 3A C.J.S. P. 409, Ambiguity, as follows:

The term has been said to imply either, on the one hand, a concealment of the real meaning or intention of the writer which does not appear on the lace of the words used, until these words are brought in contact with collateral facts or until the facts are shown, or, on the other hand, a clear expression of the party’s intention, and the existence of a doubt not as to the intention, but as to the object to which the intention applies.

The term “latent ambiguity” is defined to mean an ambiguity which arises not upon the words of the instrument, as looked at in themselves, but upon those words when applied to the object or subject which they describe. It is one which does not appear on the face of the language used or the instrument being considered, or when the words apply equally to two or more different subjects or things, as where the language employed is clear and intelligible and suggests but a single meaning, but some extrinsic fact or evidence aliunde, creates a necessity for interpretation or a choice among two or more possible meanings.

*625It has been said that a latent ambiguity occurs where a writing appears on its face clear and unambiguous, but which, in fact, is shown by extrinsic evidence to be uncertain in meaning, or where a description, apparently plain and unambiguous, is shown to fit different pieces of property.

In order for the court to determine whether a latent ambiguity exists, it is obviously necessary that it consider evidence of extraneous and collateral facts as to extrinsic circumstances. Logan v. Wiley, 357 Pa. 547, 55 A. 2d 366 (1947). It is a well settled rule that extrinsic evidence is admissible to show that a latent ambiguity exists. Hall v. Equitable Life Assurance Society, 295 Mich. 404, 295 N.W. 204; McCarty v. Mercury Metalcraft Company, 372 Mich. 567, 129 N.W. 2d 854 (1964); Widney v. Hess, 242 Iowa 342, 45 N.W. 2d 233 (1951). See Ellege v. Henderson, 142 Ark. 421, 218 S.W. 831; Easton v. Washington County Insurance Co., 391 Pa. 28, 137 A. 2d 332. In treating the matter as it relates to the parol evidence rule, the author of Jones on Evidence (Vol. 3, p. 134, § 16:23) says:

In a preceding section it has been pointed out that where a written instrument appears to be complete on its face, a presumption will be indulged that the parties have included all of the terms of their agreement in the instrument.

While for all practical purposes, if such a presumption is indulged, it will have a conclusive effect to prevent bringing in additional terms, it does not have the effect of barring disclosure of hidden uncertainties, and to this extent the presumption is rebuttable and parol evidence admissible not only to bring out the latent ambiguity but to explain the true intent of the parties and to resolve the uncertainty, if it can be resolved, in order to save the contract.

To discover a latent ambiguity, it is proper to go outside the instrument to ascertain whether the words used aptly fit the facts existing when the instrument was executed and the words used. Widney v. Hess, supra; Queens Insurance Company of America v. Meyer Milling Co., 43 F. 2d 885 (8th Cir. 1930).

It is generally held that the question whether an ambiguity exists is one of law for the court. Steele v. McCargo, 260 F. 2d 753 (8th Cir. 1958); Easton v. Washington County Insurance *626Co., supra. In determining whether an ambiguity exists, a contract must be read in the light of what the parties intended as gathered from the language thereof in view of all surrounding circumstances. Arkansas Amusement Co. v. Kempner, 57 F. 2d 466 (8th Cir. 1932). See Ellege v. Henderson, supra; 17A C.J.S. 37, Contracts, § 294b(3) P. 37. The words of a contract, which are not ambiguous in the abstract, may, when considered in relation to the circumstances surrounding the making of it, create an ambiguity requiring interpretation. Arkansas Amusement Co. v. Kempner, supra; Paepcke-Leicht Lbr. Co. v. Talley, 106 Ark. 400, 153 S.W. 833. See Ellege v. Henderson, supra; Easton v. Washington County Insurance Co., supra. In making the determination, courts may acquaint themselves with the persons and circumstances that are the subjects of the statements in the written agreement and place themselves in the position of the parties who made the contract, so as to view the circumstances as they did. Wood v. Kelsey, 90 Ark. 272, 119 S.W. 258.

There is another facet of the problem of admissibility of parol testimony to explain a contract very closely related to the question whether a latent ambiguity exists. Our cases clearly recognize that parol evidence is admissible to explain the meaning of the terms or words used when they have a technical meaning or, by custom and usage are used in a sense other than in an' ordinary meaning of the words. Paepcke-Leicht Lbr. Co. v. Talley, supra; Wilkes v. Stacy, 113 Ark. 556, 169 S.W. 796. In the case last cited, we quoted from Lawson on Contracts, Second Edition, 5 390, p. 450, as follows:

The customs of particular classes of men soon give to particular words different meanings from those which they may have among other classes, or in the community generally. Mercantile contracts are commonly framed in a language peculiar to merchants, and hardly understood outside their world. Agreements which are entered into every day in the year between members of different trades and professions are expressed in technical and uncommon terms. The intentions of the parties, though perfectly well known to themselves, would be defeated were the language employed to be strictly construed according to its ordinary meaning in the world at large. Hence, while words in a contract relating to the ordinary transactions of life are to be construed according to their plain, ordinary and popular. *627meaning, yet if, in reference to the subject-matter of the contract, particular words and expressions have by usage acquired a meaning different from their plain, ordinary and popular meaning, the parties using those words in such a contract must be taken to have used them in their peculiar sense. And so words, technical or ambiguous on their face, or foreign or peculiar to the sciences or the arts, or to particular trades, professions, occupations, or localities, may be explained, where they are employed in written instruments, by parol evidence of usage.

Obviously, the trial court found that an ambiguity existed. The pertinent contract terms hang upon the meaning of the words “supervision” and “actual cost.” The real issue is whether the salary and expenses of Benning while he was acting as superintendent of the Crossett job are a part of the “actual costs” as distinguished from the allowance of $20,000 for “supervision.” Benning testified that the charge in question covered only the time he spent on the North Crossett job, and that appellee employed no superintendent on the job, although there were four working foremen. It is significant that appellant thought that evidence of the original negotiations was admissible, because its attorney introduced evidence thereof by cross-examination of Benning over appellee’s attorney’s objection that it should be considered for impeachment only.

There was evidence that the following circumstances existed at the time the contract being construed was entered into:

Sutton Construction Company had failed. A representative of appellant had prepared a contract relating to unfinished sewer jobs at Hope and McGehee. Benning agreed with the two persons then representing appellant that he would not charge any of his time to these two jobs, but that it would be charged for the North Crossett job, which apparently had not been commenced by Sutton. Benning told the interested parties how much salary he was drawing ($300 per week) and that he was drawing $50 per week as expenses, which he said was to be charged to the Hope and McGehee jobs. According to Benning, it was agreed that he was to get a guaranteed profit of $20,000 on the *628North Crossett job and one-third of any profit, and his salary to be charged to the job was not included in the $20,000 figure. The first estimate made by appellee included two $20,000 items, one for profit and the other for supervision. On most construction jobs the size of the North Crossett job there is a construction superintendent. The original contract required that a construction superintendent or foreman who had full authority to act for the contractor be employed at the site.

Carrie New testified that he was familiar with the custom in the construction business as to whether the managing executive of a company is entitled to charge his salary to the job in addition to a fixed fee for supervision. He stated that the practice is that when the contract is let on a cost-plus fixed fee basis, the fee is over and above all job costs, which include office overhead, executives’ salaries, general contractor’s labor, material and all subcontract costs. Normally, he said, a corporation would have an office staff and executive officers, and the duties of the latter may vary in that they double as superintendents, estimators, expeditors and purchasers. In a small organization, he said that one man may act as all these. He was present when the final draft of the contract was made and did not understand that the $20,000 figure therein was to be for Benning's salary and expenses, but did understand that was a fee to be paid over and above any profit or whether any profit was realized or not. John W. Cole, Jr., appellee’s attorney at the drafting, was not familiar with usage in the construction field, but had the same understanding as New as to the $20,000. He recalled that there was discussion directed at the amount of Benning’s personal salary and stated that it was agreed that the $20,000 payment would not be a substitute for it. A portion of the stated contract form of the American Institute of Architects for use when cost of work plus a fixed fee forms the basis of payment was introduced as an exhibit. It contained a clause under the heading of “Costs to be Reimbursed” providing for payment of salaries of the contractor’s employees stationed at the field office in whatever capacity employed.

The contract in question was not abstracted but the paragraph in question is stated thus:

It is further agreed that 2nd Subcontractor will receive *629S20.000.00 for supervision which will be added to actual cost, figure. It is further agreed that the difference between actual cost and bid price will be divided as follows: 33-1/3% to 2nd Subcontractor; 66-2/3% to 1st Subcontractor. (Plaintiff's Exhibit No. 2)

It must be noted that the payment of this 120,000 was to be made to appellee, a corporation, and not to Benning. Appellant’s attorney emphasizes the fact that this language constituted a change of the same paragraph in the next preceding draft in that it was therein provided that “the 2nd Subcontractor will, nevertheless, receive the sum of S20.000 for his supervisory services.”

I do not see how we can say the court erred in holding that the contract was ambiguous in view of the surrounding circumstances and collateral facts. If it was ambiguous, then we only have to determine whether there is any substantial evidence to support the judgment, since the judge also sat as the jury, and the question was for the jury. Ft. Smith Appliance & Service Co. v. Smith, 218 Ark. 411, 236 S.W. 2d 583; Bailey v. Sutton, 208 Ark. 184, 185 S.W. 2d 276; Paepcke-Leicht Lbr. Co. v. Talley, 106 Ark. 400, 153 S.W. 833.

Once it was shown that there was a latent ambiguity or that the words used by the parties were commonly accorded a meaning different from their ordinary meaning, oral evidence was admissible to explain them. Ft. Smith Appliance & Service Co. v. Smith, supra; Paepcke-Leicht Lbr. Co. v. Talley, supra; Ellege v. Henderson, 142 Ark. 421, 218 S.W. 831. Evidence of the way in which a particular term is understood commercially, or in a particular trade or business is admissible, as is evidence of custom and usage, including local popular and ?eneral use. Paepcke-Leicht Lbr. Co. v. Talley, supra; Taylor v. Union Sawmill Co., 105 Ark. 518, 152 S.W. 150; McCarthy v. McArthur, 69 Ark. 313, 63 S.W. 56; Jackson County Gin Co. v. McQuistion, 177 Ark. 60, 5 S.W. 2d 729; Davis v. Martin Slave Co., 113 Ark. 325, 168 S.W. 553. Testimony of the parties as to the meaning of the tehns is also admissible. Ellege v. Henderson, supra. Parol evidence is also competent to explain the situation and relation of the parties and the surrounding circumstances at the time of the execution of the contract. Clear Creek Oil & Gas Co. v. Bushmaier, 165 Ark. 303, 264 S.W. 830.

The matter is treated in the Uniform Commercial Code. *630See Ark. Stat. Ann. § 85-1-205 (Add. 1961). A usage of trade in the vocation or trade in which the parties are engaged or of which they should be aware gives particular meaning to and supplements or qualifies terms of an agreement. Ark. Stat. Ann. § 85-1-205(4). An applicable usage of trade in the place where any part of performance is to occur shall be taken into consideration as to that part of performance is to occur shall be taken into consideration as to that part of performance. A usage of trade is any practice or method of dealing having such regularity of observance in a place, vocation or trade as to justify an expectation that it will be observed with respect to the transaction in question. Ark. Stat. Ann. § 85-1-205(2), (5). The committee comments are particularly enlightening. In part, they are:

This Act rejects both the “lay-dictionary” and the “conveyancer’s” reading of a commercial agreement. Instead the meaning of the agreement of the parties is to be. determined by the language used by them and by their action, read and interpreted in the light of commercial practices and other surrounding circumstances. The measure and background for interpretation are set by the commercial context, which may explain and supplement even the language of a formal or final writing.

* * *

This Act deals with “usage of trade” as a factor in reaching the commercial meaning of the agreement which the parties have made. The language used is to be interpreted as meaning what it may fairly be expected to mean to parties involved in the particular commercial transaction in a given locality or in a given vocation or trade. By adopting in this context the term “usage of trade” this Act expresses its intent to reject those cases which see evidence of “custom” as representing an effort to displace or negate “established rules of law.”

* * *

A usage of trade under subsection (2) must have the “regularity of observance" specified. The ancient English tests for “custom” are abandoned in this connection. Therefore, it is not required that a usage of trade be “ancient or immemorial,” “universal” or the *631like. Under the requirement of subsection (2) full recognition is thus available for new usages and for usages currently observed by the great majority of decent dealers, even though dissidents ready to cut corners do not agree.

See also, 17 Am. Jur. 2d 643, Contracts, § 251.

In addition to the evidence set out ahove, there was other substantial evidence in appellee’s favor. Benning testified he spent 95% of his time on the North Crossett sewer job. Carrie New said that Benning acted as construction superintendent on the North Crossett job and that he knew of no other person employed in that capacity.

It is true that there is also evidence from which a contrary result might have been reached, but this does not affect the substantiality of the evidence to support the conclusion reached by the court sitting as a jury. I would affirm the judgment.

I am authorized to state that Mr. Justice Brown joins in this dissent.

TRAYNOR, C. J.

Dallas Masterson and his wife Rebecca owned a ranch as tenants in common. On February 25, 1958, they conveyed it to Medora and Lu Sine by a grant deed “Reserving unto the Grantors herein an option to purchase the above described property on or before February 25, 1968” for the “same consideration as being paid heretofore plus their depreciation value of any improvements Grantees may add to the property from and after two and a half years from this date.” Medora is Dallas’ sister and Lu’s wife. Since the conveyance Dallas has been adjudged bankrupt. His trustee in bankruptcy and Rebecca brought this declaratory relief action to establish their right to enforce the option.

The case was tried without a jury. Over defendants’ objection the trial court admitted extrinsic evidence that by “the same consideration as being paid heretofore” both the grantors and the grantees meant the sum of $50,000 and by “depreciation value of any improvements” they meant the depreciation value of improvements to be computed by deducting from the total amount of any capital expenditures made by defendants grantees the amount of depreciation allowable to them under United States income tax regulations as of the time of the exercise of the option.

The court also determined that the parol evidence rule precluded admission of extrinsic evidence offered by defendants to show that the parties wanted the property kept in the Masterson family and that the option was therefore personal to the grantors and could not be exercised by the trustee in bankruptcy.

The court entered judgment for plaintiffs, declaring their right to exercise the option, specifying in some detail how it could be exercised, and reserving jurisdiction to supervise the manner of its exercise and to determine the amount that plaintiffs will be required to pay defendants for their capital expenditures if plaintiffs decide to exercise the option.

Defendants appeal. They contend that the option provision is too uncertain to be enforced and that extrinsic evidence as to its meaning should not have been admitted. The trial court properly refused to frustrate the obviously declared intention of the grantors to reserve an option to repurchase by an overly meticulous insistence on completeness and clarity of written expression.' (See California Lettuce Growers, Inc. v. Union Sugar Co. (1955) 45 Cal.2d 474, 481 [289 P.2d 785, 49 A.L.R.2d 496] ; Rivers v. Beadle (1960) 183 Cal. App.2d 691, 695-697 [7 Cal.Rptr. 170].) It properly admitted extrinsic evidence to explain the language of the deed (Nofziger v. Holman (1964) 61 Cal.2d 526, 528 [39 Cal.Rptr. 384, 393 P.2d 696] ; Barham v. Barham (1949) 33 Cal.2d 416, 422-423 [202 P.2d 289] ; Union Oil Co. v. Union Sugar Co. (1948) 31 Cal.2d 300, 306 [188 P.2d 470] ; Schmidt v. Macco Constr. Co. (1953) 119 Cal.App.2d 717, 730 [260 P.2d 230] ; see Farnsworth, “Meaning” in the Law of Contracts (1967) 76 Yale L.J. 939, 959-965; Corbin, The Interpretation of Words and the Parol Evidence Rule (1965) 50 Cornell L.Q. 161) to the end that the consideration for the option would appear with sufficient certainty to permit specific enforcement (see Mc-Keon v. Santa Claus of Cal., Inc. (1964) 230 Cal.App.2d 359, 364 [41 Cal.Rptr. 43] ; Vurrow v. Timmsen (1963) 223 Cal. App.2d 283, 288 [35 Cal.Rptr. 668, 100 A.L.R.2d 544]). The trial court erred, however, in excluding the extrinsic evidence that the option was personal to the grantors and therefore nonassignable.

When the parties to a written contract have agreed to it as an “integration”—a complete and final embodiment of the terms of an agreement—parol evidence cannot be used to add to or vary its terms. (Pollyanna Homes, Inc. v. Berney (1961) 56 Cal.2d 676, 679-680 [16 Cal.Rptr. 345, 365 P.2d 401] ; Hale v. Bohannon (1952) 38 Cal.2d 458, 465 [241 P.2d 4] ; see 3 Corbin, Contracts (1960) § 573, p. 357; Rest., Contracts (1932) §§ 228 (andcom. a), 237; Code Civ. Proc., § 1856; Civ. Code, § 1625.) When only part of the agreement is integrated, the same rule applies to that part, but parol evidence may be used to prove elements of the agreement not reduced to writing. (Hulse v. Juillard Fancy Foods Co. (1964) 61 Cal.2d 571, 573 [39 Cal.Rptr. 529, 394 P.2d 65] ; Schwartz v. Shapiro (1964) 229 Cal.App.2d 238, 250 [40 Cal.Rptr. 189] ; Mangini v. Wolfschmidt, Ltd. (1958) 165 Cal.App.2d 192, 200-201 [331 P.2d 728] ; Rest., Contracts (1932) § 239.)

The crucial issue in determining whether there has been an integration is whether the parties intended their writing to serve as the exclusive embodiment of their agreement. The instrument itself may help to resolve that issue. It may state, for example, that “there are no previous understandings or agreements not contained in the writing,” and thus express the parties’ “intention to nullify antecedent understandings or agreements.” (See 3 Corbin, Contracts (1960) § 578, p. 411.) Any such collateral agreement itself must be examined, however, to determine whether the parties intended the subjects of negotiation it deals with to be included in, excluded from, or otherwise affected by the writing. Circumstances at the time of the writing may also aid in the determination of such integration. (See 3 Corbin, Contracts (1960) §§ 582-584; McCormick, Evidence (1954) § 216, p. 441; 9 Wigmore, Evidence (3d ed. 1940) § 2430, p. 98, § 2431, pp. 102-103; Witkin, Cal. Evidence (2d ed. 1966) §721; Schwartz v. Shapiro, supra, 229 Cal.App.2d 238, 251, fn. 8; contra, 4 Williston, Contracts (3d ed. 1961) § 633, pp. 1014-1016.)

California cases have stated that whether there ivas an integration is to be determined solely from the face of the instrument (e.g., Thoroman v. David (1926) 199 Cal. 386, 389-390 [249 P. 513] ; Heffner v. Gross (1919) 179 Cal. 738, 742-743 [178 P. 860] ; Gardiner v. McDonogh (1905) 147 Cal. 313, 318-321 [81 P. 964] ; Harrison v. McCormick (1891) 89 Cal. 327, 330 [26 P. 830, 23 Am.St.Rep. 469]), and that the question for the court is whether it ‘1 appears to be a complete . . . agreement. ...” (See Ferguson v. Koch (1928) 204 Cal. 342, 346 [268 P. 342, 58 A.L.R. 1176] ; Harrison v. McCormick, supra, 89 Cal. 327, 330.) Neither of these strict formulations of the rule, however, has been consistently applied. The requirement that the writing must appear incomplete on its face has been repudiated in many cases where parol evidence was admitted “to prove the existence of a separate oral agreement as to any matter on which the document is silent and which is not inconsistent with its terms”—even though the instrument appeared to state a complete agreement. (E.g., American Industrial Sales Corp. v. Airscope, Inc. (1955) 44 Cal.2d 393, 397 [282 P.2d 504, 49 A.L.R.2d 1344] ; Stockburgcr v. Dolan (1939) 14 Cal.2d 313, 317 [94 P.2d 33, 128 A.L.R. 83] ; Crawford v. France (1933) 219 Cal. 439, 443 [27 P.2d 645] ; Buckner v. A. Leon & Co. (1928) 204 Cal. 225, 227 [267 P. 693] ; Sivers v. Sivers (1893) 97 Cal. 518, 521 [32 P. 571] ; cf. Simmons v. California Institute of Technology (1949) 34 Cal.2d 264, 274 [209 P.2d 581].) Even under the rule that the writing alone is to be consulted, it was found necessary to examine the alleged collateral agreement before concluding that proof of it was precluded by the writing alone. (See 3 Corbin, Contracts (1960) § 582, pp. 444-446.) It is therefore evident that “The conception of a writing as wholly and intrinsically self-determinative of the parties’ intent to make it a sole memorial of one or seven or twenty-seven subjects of negotiation is an impossible one.” (9 Wigmore, Evidence (3d ed. 1940) §2431, p. 103.) For example, a promissory note given by a debtor to his creditor may integrate all their present contractual rights and obligations, or it may be only a minor part of an underlying executory contract that would never be discovered by examining the face of the note.

In formulating the rule governing parol evidence, several policies must be accommodated. One policy is based on the assumption that written evidence is more accurate than human memory. (Germain Fruit Co. v. J. K. Armsby Co. (1908) 153 Cal. 585, 595 [96 P. 319].) This policy, however, can be adequately served by excluding parol evidence of agreements that directly contradict the writing. Another policy is based on the fear that fraud or unintentional invention by witnesses interested in the outcome of the litigation will mislead the finder of facts. (Germain Fruit Co. v. J. K. Armsby Co., supra, 153 Cal. 585, 596; Mitchill v. Lath (1928) 247 N.Y. 377, 388 [160 N.E. 646, 68 A.L.R. 239] [dissenting opinion by Lehman, J.]; see 9 Wigmore, Evidence (3d ed. 1940) § 2431, p. 102; Murray, The Parol Evidence Bule: A Clarification (1966) 4 Duquesne L.Rev. 337, 338-339.) McCormick has suggested that the party urging the spoken as against the written word is most often the economic underdog, threatened by severe hardship if the writing is enforced. In his view the parol evidence rule arose to allow the court to control the tendency of the jury to find through sympathy and without a dispassionate assessment of the probability of fraud or faulty memory that the parties made an oral agreement collateral to the written contract, or that preliminary tentative agreements were not abandoned when omitted from the writing. (See McCormick, Evidence (1954) § 210.) He recognizes, however, that if this theory were adopted in disregard of all other considerations, it would lead to the exclusion of testimony concerning oral agreements whenever there is a writing and thereby often defeat the true intent of the parties. (See McCormick, op. cit. supra, § 216, p. 441.)

Evidence of oral collateral agreements should be excluded only when the fact finder is likely to be misled. The rule must therefore be based on the credibility of the evidence. One such standard, adopted by section 240(1) (b) of the Restatement of Contracts, permits proof of a collateral agreement if it “is such an agreement as might naturally be made as a separate agreement by parties situated as were the parties to the written contract.’’ (Italics added; see McCormick, Evidence (1954) § 216, p. 441; see also 3 Corbin, Contracts (1960) § 583, p. 475, § 594, pp. 568-569; 4 Williston, Contracts (3d ed. 1961) § 638, pp. 1039-1045.) The draftsmen of the Uniform Commercial Code would exclude the evidence in still fewer instances: “If the additional terms are such that, if agreed upon, they would certainly have been included in the document in the view of the court, then evidence of their alleged making must be kept from the trier of fact.” (Com. 3, § 2-202, italics added.)1

The option clause in the deed in the present ease does not explicitly provide that it contains the complete agreement, and the deed is silent on the question of assignability. Moreover, the difficulty of accommodating the formalized structure of a deed to the insertion of collateral agreements makes it less likely that all the terms of such an agreement were included.2 (See 3 Corbin, Contracts (1960) §587; 4 Williston, Contracts (3d ed. 1961) §645; 70 A.L.R. 752, 759 (1931); 68 A.L.R. 245 (1930).) The statement of the reservation of the option might well have been placed in the recorded deed solely to preserve the grantors’ rights against any possible future purchasers, and this function could well be served without any mention of the parties ’ agreement that the option was personal. There is nothing in the record to indicate that the parties to this family transaction, through experience in land transactions or otherwise, had any warning of the disadvantages of failing to put the whole agreement in the deed. This ease is one, therefore, in which it can be said that a collateral agreement such as that alleged “might naturally be made as a separate agreement. ’ ’ A fortiori, the case is not one in which the parties “would certainly” have included the collateral agreement in the deed.

It is contended, however, that an option agreement is ordinarily presumed to be assignable if it contains no provisions forbidding its transfer or indicating that its performance involves elements personal to the parties. (Mott v. Cline (1927) 200 Cal. 434, 450 [253 P. 718] ; Altman v. Blewett (1928) 93 Cal.App. 516, 525 [269 P. 751].) The fact that there is a written memorandum, however, does not necessarily preclude parol evidence rebutting a term that the law would otherwise presume. In American Industrial Sales Corp. v. Airscope, Inc., supra, 44 Cal.2d 393, 397-398, we held it proper to admit parol evidence of a contemporaneous collateral agreement as to the place of payment of a note, even though it contradicted the presumption that a note, silent as to the place of payment, is payable where the creditor resides. (For other examples of this approach, see Richter v. Union Land etc. Co. (1900) 129 Cal. 367, 375 [62 P. 39] [presumption of time of delivery rebutted by parol evidence] ; Wolters v. King (1897) 119 Cal. 172, 175-176 [51 P. 35] [presumption of time of payment rebutted by parol evidence]; Mangini v. Wolfschmidt, Ltd., supra, 165 Cal.App.2d 192, 198-201 [presumption of duration of an agency contract rebutted by parol evidence] ; Zinn v. Ex-Cell-O Corp. (1957) 148 Cal.App.2d 56, 73-74 [306 P.2d 1017] ; see also Rest., Contracts, § 240, com. c.)3 Of course a statute may preclude parol evidence to rebut a statutory presumption. (E. G. Neff v. Ernst (1957) 48 Cal.2d 628, 635 [311 P.2d 489] [commenting on Civ. Code, § 1112] ; Kilfoy v. Fritz (1954) 125 Cal.App.2d 291, 293-294 [270 P.2d 579] [applying Deering’s Gen. Laws, 1937, Act. 652, § 15(a)]; see also Com. Code, § 9-318, subd. (4).) Here, however, there is no such statute. In the absence of a controlling statute the parties may provide that a contract right or duty is nontransfer able. (La Rue v. Groezinger (1890) 84 Cal. 281, 283 [24 P. 42, 18 Am.St.Rep. 179] ; Benton v. Hofmann Plastering Co. (1962) 207 Cal.App.2d 61, 68 [24 Cal.Rptr. 268] ; Parkinson v. Caldwell (1954) 126 Cal.App.2d 548, 552-553 [272 P.2d 934] ; see 4 Corbin, Contracts (1951) §§872-873.) Moreover, even when there is no explicit agreement— written or oral—that contractual duties shall be personal, courts will effectuate a presumed intent to that effect if the circumstances indicate that performance by a substituted person would be different from that contracted for. (Farmland Irr. Co. v. Dopplmaier (1957) 48 Cal.2d 208, 222 [308 P.2d 732, 66 A.L.R.2d 590] ; Prichard v. Kimball (1923) 190 Cal. 757, 764-765 [214 P. 863] ; Simmons v. Zimmerman (1904) 144 Cal. 256, 260-261 [79 P. 451, 1 Ann.Cas. 850] ; La Rue v. Groezinger, supra, 84 Cal. 281, 285; Coykendall v. Jackson (1936) 17 Cal.App.2d 729, 731 [62 P.2d 746] ; see 4 Corbin, Contracts (1951) § 865; 3 Williston, Contracts (3d ed. 1960) § 412, pp. 32-33; Rest., Contracts (Tent. Draft No. 3, 1967) §150(2).)

In the present case defendants offered evidence that the parties agreed that the option was not assignable in order to keep the property in the Masterson family. The trial court erred in excluding that evidence.

The judgment is reversed.

Peters, J., Tobriner, J., Mosk, J., a.nd Sullivan, J., concurred.

BURKE, J.

I dissent. The majority opinion:

(1) Undermines the parol evidence rule as we have known it in this state since at least 18721 by declaring that parol evidence should have been admitted by the trial court to show that a written option, absolute and unrestricted in form, was intended to be limited and nonassignable;

(2) Renders suspect instruments of conveyance absolute on their face;

(3) Materially lessens the reliance which may be placed upon written instruments affecting the title to real estate; and

(4) Opens the door, albeit unintentionally, to a new technique for the defrauding of creditors.

The opinion permits defendants to establish by parol testimony that their grant2 to their brother (and brother-in-law) of a written option, absolute in terms, was nevertheless agreed to be nonassignable by the grantee (now a bankrupt), and that therefore the right to exercise it did not pass, by operation of the bankruptcy laws, to the trustee for the benefit of the grantee’s creditors.

And how was this to be shown ? By the proffered testimony of the bankrupt optionee himself! Thereby one of his assets (the option to purchase defendants’ California ranch) would be withheld from the trustee in bankruptcy and from the bankrupt’s creditors. Understandably the trial court, as required by the parol evidence rule, did not allow the bankrupt by parol to so contradict the unqualified language of the written option.

The court properly admitted parol evidence to explain the intended meaning of the “same consideration” and “depreciation value” phases of the written option to purchase defendants’ land, as the intended meaning of those phrases was not clear. However, there was nothing ambiguous about the granting language of the option and not the slightest suggestion in the document that the option was to be nonassignable. Thus, to permit such words of limitation to be added by parol is to contradict the absolute nature of the grant, and to directly violate the parol evidence rule.

Just as it is unnecessary to state in a deed to “lot X” that the house located thereon goes with the land, it is likewise unnecessary to add to “I grant an option to Jones” the words “and Ms assigns” for the option to be assignable. As hereinafter emphasized in more detail, California statutes expressly declare that it is assignable, and only if I add language in writing showing my intent to withhold or restrict the right of assignment may the grant be so limited. Thus, to seek to restrict the grant by parol is to contradict the written document in violation of the parol evidence rule.

The majority opinion arrives at its holding via a series of false premises which are not supported either in the record of this case or in such California authorities as are offered.

The parol evidence rule is set forth in clear and definite language in the statutes of this state. (Civ. Code, § 1625; Code Civ. Proc., § 1856.) It “is not a rule of evidence but is one of substantive law. . . . The rule as applied to contracts is simply that as a matter of substantive law, a certain act, the act of embodying the complete terms of an agreement in a writing (the ‘integration’), becomes the contract of the parties.” (Hale v. Bohannon (1952) 38 Cal.2d 458, 465 [1, 2] [241 P.2d 4], quoting from Estate of Gaines (1940) 15 Cal.2d 255, 264-265 [100 P.2d 1055].) The rule is based upon the sound principle that the parties to a written instrument, after committing their agreement to or evidencing it by the writing, are not permitted to add to, vary or contradict the terms of the writing by parol evidence. As aptly expressed by the author of the present majority opinion, speaking for the court in Parsons v. Bristol Dev. Co. (1965) 62 Cal.2d 861, 865 [2] [44 Cal.Rptr. 767, 402 P.2d 839], and in Coast Bank v. Minderhout (1964) 61 Cal.2d 311, 315 [38 Cal.Rptr. 505, 392 P.2d 265], such evidence is “admissible to interpret the instrument, but not to give it a meaning to which it is not reasonably susceptible.” (Italics added.) Or, as stated by the same author, concurring in Laux v. Freed (1960) 53 Cal.2d 512, 527 [2 Cal.Rptr. 265, 348 P.2d 873], ‘1 extrinsic evidence is not admissible to ‘add to, detract from, or vary its terms.’ ” (Italics added.)

At the outset the majority in the present case reiterate3 that the rule against contradicting or varying the terms of a writing remains applicable when only part of the agreement is contained in the writing, and parol evidence is used to prove elements of the agreement not reduced to writing. But having restated this established rule, the majority opinion inexplicably proceeds to subvert it.

Each of the three cases cited by the majority (fn. 3, ante) holds that although parol evidence is admissible to prove the parts of the contract not put in writing, it is not admissible to vary or contradict the writing or prove collateral agreements which are inconsistent therewith. The meaning of this rule (and the application of it found in the eases) is that if the asserted unwritten elements of the agreement would contradict, add to, detract from, vary or be inconsistent with the written agreement, then such elements may not be shown by parol evidence.

The contract of sale and purchase of the ranch property here involved was carried out through a title company upon written escrow instructions executed by the respective parties after various preliminary negotiations. The deed to defendant grantees, in which the grantors expressly reserved an option to repurchase the property within a ten-year period and upon a specified consideration, was issued and delivered in consummation of the contract. In neither the written escrow instructions nor the deed containing the option is there any language even suggesting that the option was agreed or intended by the parties to be personal to the grantors, and so nonassignable. The trial judge, on at least three separate occasions, correctly sustained objections to efforts of defendant optionors to get into evidence the testimony of Dallas Masterson (the bankrupt holder of the option) that a part of the agreement of sale of the parties was that the option to repurchase the property was personal to him, and therefore unassignable for benefit of creditors. But the majority hold that that testimony should have been admitted, thereby permitting defendant optionors to limit, detract from and contradict the plain and unrestricted terms of the written option in clear violation of the parol evidence rule and to open the door to the perpetration of fraud.

Options are property, and are widely used in the sale and purchase of real and personal property. One of the basic incidents of property ownership is the right of the owner to sell or transfer it. The author of the present majority opinion, speaking for the court in Farmland Irr. Co. v. Dopplmaier (1957) 48 Cal.2d 208, 222 [308 P.2d 732, 66 A.L.R.2d 590], put it this way: 11 The statutes in this state clearly manifest a policy in favor of the free transferability of all types of property, including rights under contracts.”4 (Citing Civ. Code, §§ 954, 1044, 14585; see also 40 Cal.Jur.2d 289-291, and cases there cited.) These rights of the owner of property to transfer it, confirmed by the cited code sections, are elementary rules of substantive law and not the mere disputable presumptions which the majority opinion in the present case would make of them. Moreover, the right of transferability applies to an option to purchase, unless there are words of limitation in the option forbidding its assignment or showing that it was given because of a peculiar trust or confidence reposed in the optionee. (Mott v. Cline (1927) 200 Cal. 434, 450 [11] [253 P. 718] ; Prichard v. Kimball (1923) 190 Cal. 757, 764-765 [4, 5] [214 P. 863] ; Altman v. Blewett (1928) 93 Cal.App. 516, 525 [3] [269 P. 751] ; see also 5 Cal.Jur.2d 393, 395-396, and cases there cited.) Thus, in Prichard the language of the document ilself (a written, expressly nonassignable lease, with option to buy) was held to establish the trust or confidence reposed in the optionee and so to negate assignability of the option.

The right of an optionee to transfer his option to purchase property is accordingly one of the basic rights which accompanies the option unless limited under the language of the option itself. To allow an optionor to resort to parol evidence to support his assertion that the written option is not transferable is to authorize him to limit the option by attempting to restrict and reclaim rights with which he has already parted. A clearer violation of two substantive and basic rules of law— the parol evidence rule and the right of free transferability of property—would be difficult to conceive.

The majority opinion attempts to buttress its approach by asserting (ante, p. 226) that “California eases have stated that whether there ivas an integration is to be determined solely from the face of the instrument [citations], and that the question for the court is whether it 1 appears to be a complete . . . agreement. . . . [citations],” but that “Neither of these strict formulations of the rule . . . has been consistently applied. ’ ’

The majority’s claim of inconsistent application of the parol evidence rule by the California courts fails to find support in the examples offered. First, the majority opinion asserts (ante, p. 226) that “The requirement that the writing must appear incomplete on its face has been repudiated in many cases where parol evidence was admitted 'to prove the existence of a separate oral agreement as to any matter on which the document is silent and which is not inconsistent with its terms’—even though the instrument appeared to state a complete agreement. [Citations.] ” But an examination of the cases cited in support of the quoted statement discloses that on the contrary in every case which is pertinent here (with a single exception) the writing was obviously incomplete on its face.6 In the one exception (Stockburger v. Dolan (1939) 14 Cal.2d 313, 317 [94 P.2d 33,128 A.L.R. 83]) it was held that lessors under a lease to drill for oil in an area zoned against such drilling should be permitted to show by parol that the lessee had contemporaneously agreed orally to seek a variance—an agreement which, as the opinion points out, did not contradict the written contract. But what is additionally noteworthy in Stockburger, and controlling here, is the further holding that lessors could not show by parol that lessee had orally agreed that a lease provision suspending payment of rental under certain circumstances would not apply during certain periods of time—as “evidence to that effect would vary the terms of the contract in that particular . . . . ” (P. 317 [5] of 14 Cal.2d.)

In further pursuit of what would appear to he nonexistent support for its assertions of inconsistency in California eases, the majority opinion next declares (ante, p. 226) that “Even under the rule that the writing alone is to be consulted, it was found necessary to examine the alleged collateral agreement before concluding that proof of it was precluded by the writing alone. (See 3 Corbin, Contracts (1960) § 582, pp. 444-446.) ” Not only are no California eases cited, by the majority in supposed support for the quoted declaration (offered by the majority as an example of inconsistent applications of the parol evidence rule by California courts), but 3 Corbin, Contracts, which the majority do cite, likewise refers to no California cases, and makes but scanty citation to any eases whatever. In any event, in what manner other than by “examining” an alleged collateral agreement is it possible for a court to rule upon the admissibility of testimony or upon an offer of proof with respect to such agreement?

The majority opinion has thus demonstrably failed to substantiate its next utterance (ante, pp. 226-227) that “ ‘The conception of a writing as wholly and intrinsically self-determinative of the parties ’ intent to make it a sole memorial of one or seven or twenty-seven subjects of negotiation is an impossible one,’ ” citing 9 Wigmore, Evidence (3d ed. 1940) section 2431, page 103, whose views on the subject were rejected by this court as early as 1908 in Germain Fruit Co. v. J. K. Arms-by Co., 153 Cal. 585, 595 [96 P. 319], which, indeed, is also cited by the majority in the present case. And the example given, that of a promissory note, is obviously specious. Earely, if ever, does a promissory note given by a debtor to his creditor integrate all their agreements (that is not the purpose it serves) ; it may or it may not integrate all their present contractual rights and obligations; but relevant to the parol evidence rule, at least until the advent of the majority opinion in this ease, alleged collateral agreements which would vary or contradict the terms and conditions of a promissory note may not be shown by parol. (Bank of America etc. Assn. v. Pendergrass (1935) 4 Cal.2d 258, 263-264 [6] [48 P.2d 659].)

Upon this structure of incorrect premises and unfounded assertions the majority opinion arrives at its climax: The pronouncement of “several policies [to] be accommodated . . . {i\n formulating the rule governing parol evidence.” (Italics added.)7 Two of the “policies” as declared by the majority are: Written evidence is more accurate than human memory8 ; fraud or unintentional invention by interested witnesses may well occur.

I submit that these purported “policies” are in reality two of the basic and obvious reasons for adoption by the Legislature of the parol evidence rule as the policy in this state. Thus the speculation of the majority {ante, pp. 227-228) concerning the views of various writers on the subject and the advisability of following them in this state is not only superfluous but flies flatly in the face of established California law and policy. It serves only to introduce uncertainty and confusion in a field of substantive law which was codified and made certain in this state a century ago.

However, despite the law which until the advent of the present majority opinion has been firmly and clearly established in California and relied upon by attorneys and courts alike, that parol evidence may not be employed to vary or contradict the terms of a written instrument, the majority now announce {ante, p. 227) that such evidence “should be excluded only when the fact finder is likely tobe misled,” and that “The rule must therefore be based on the credibility of the evidence.” (Italics added.) But was it not, inter alia, to avoid misleading the fact finder, and to further the introduction of only the evidence which is most likely to be credible (the written document) , that the Legislature adopted the parol evidence rule as a part of the substantive law of this state ?

Next, in an effort to implement this newly promulgated “credibility” test, the majority opinion offers a choice of two “standards”: one, a “certainty” standard, quoted from the Uniform Commercial Code9 {ante, p. 228), and the other a “natural” standard found in the Restatement of Contracts10 {ante, p. 227), and concludes {ante, p. 228) that at least for purposes of the present case the “natural” viewpoint should prevail.

This new rule, not hitherto recognized in California, provides that proof of a claimed collateral oral agreement is admissible if it is such an agreement as might naturally have been made a separate agreement by the parties under the particular circumstances. I submit that this approach opens the door to uncertainty and confusion. Who can know what its limits are ? Certainly I do not. Por example, in its application to this case who could be expected to divine as “natural” a separate oral agreement between the parties that the assignment, absolute and unrestricted on its face, was intended by the parties to be limited to the Masterson family ?

Or, assume that one gives to his relative a promissory note and that the payee of the note goes bankrupt. By operation of law the note becomes an asset of the bankruptcy. The trustee attempts to enforce it. Would the relatives be permitted to testify that by a separate oral agreement made at the time of the execution of the note it was understood that should the payee fail in his business the maker would be excused from payment of the note, or that, as here, it was intended that the benefits of the note would be personal to the payee? I doubt that trial judges should be burdened with the task of conjuring whether it would have been “natural” under those circumstances for such a separate agreement to have been made by the parties. Yet, under the application of the proposed rule, this is the task the trial judge would have, and in essence the situation presented in the instant case is no different.

Under the application of the codes and the present case law, proof of the existence of such an agreement would not be permitted, “natural” or “unnatural.” But conceivably, as loose as the new rule is, one judge might deem it natural and another judge unnatural.* 11 And in each instance the ultimate decision would have to be made (“naturally”) on a ease-by-case basis by the appellate courts.

In an effort to provide justification for applying the newly pronounced “natural” rule to the circumstances of the present case, the majority opinion next (ante, p. 228) attempts to account for the silence of the writing in this case concerning assignability of the option, by asserting that “the difficulty of accommodating the formalized structure of a deed to the insertion of collateral agreements makes it less likely that all the terms of such an agreement were included. ’ ’ What difficulty would have been involved here, to add the words 11 this option is nonassignable”? The asserted “formalized structure of a deed” is no formidable barrier. The Legislature has set forth the requirements in simple language in section 1092 of the Civil Code. It is this: “I, A B, grant to C D all that real property situated in [naming county], State of California.,... described as follows: [describing it].” To this the grantor desiring to reserve an option to repurchase need only so state, as was done here. It is a matter of common knowledge that collateral agreements (such as the option clause here involved, or such as deed restrictions) are frequently included in deeds, without difficulty of any nature.

To support further speculation (ante, p. 228) that “the reservation of the option might well have been placed in the recorded deed solely to preserve the grantors’ rights against any possible future purchasers, and this function could well be served without any mention of the parties’ agreement that the option was personal,” the majority assert that “There is nothing in the record to indicate that the parties to this family transaction, through experience in land transactions or otherwise, had any warning of the disadvantages of failing to put the whole agreement in the deed.” (Italics added.) The facts of this case, however, do not support such claim of naivete. The grantor husband (the bankrupt businessman) testified that as none of the parties were attorneys “we wanted to contact my attorney . . . which we did. . . . The wording in the option was obtained from [the attorney].... I told him what my discussion was with the Sines [defendant grantees] and he wanted ... a little time to compose it ... . And, then this [the wording provided by the attorney] was taken to the title company at the time Mr. and Mrs. Sine and I went in to complete the transaction.” (Italics added.) The witness was an experienced businessman who thus demonstrated awareness of the wisdom of seeking legal guidance and advice in this business transaction, and who did so. Wherein lies the naive family-transaction postulated by the majority?

The majority opinion (ante, p. 229) then proceeds on the fallacious assertion that the right to transfer or to assign an option, if it contains no provisions forbidding transfer or indicating that performance involves elements personal to the parties, is a mere disputable presumption, and in purported support cites eases not one of which involves an option and in each of which the presumption which was invoked served to supply a missing but essential element of a complete agreement.12 As already emphasized hereinabove, the right of free transferability of property, including options, is one of the most fundamental tenets of substantive law, and the crucial distinction would appear self-evident between such a basic right on the one hand, and on the other hand the disputable evidentiary presumptions which the law has developed to supply terms lacking from a written instrument but essential to making it whole and complete. There is no such lack in the deed and the option reservation now at issue.

The statement of the majority opinion (ante, p. 230) that in the absence of a controlling statute the parties may provide that a contract right or duty is nontransferable, is of course true. Equally true is the next assertion (ante, p. 230) that 11 even when there is no explicit agreement—written or oral— that contractual duties shall be personal, courts will effectuate a presumed intent to that effect if the circumstances indicate that performance by a substituted person would be different from that contracted for.” But to apply the law of contracts for the rendering of personal services to the reservation of an option in a deed of real estate calls for a misdirected use of the rule, particularly in an instrument containing not one word from which such “a presumed intent to that effect” could be gleaned. Particularly is the holding objectionable when the result is to upset established statutory and case law in this state that1 ‘ circumstances ’1 shown by parol may not be employed to contradict, add to or detract from, the agreement of the parties as expressed by them in writing. And once again the quoted pronouncement of the majority concerning the showing of “circumstances" by parol fails to find support in the cases they cite,13 which relate to a patent license agreement, held to be assignable absent terms indicating a contrary intent ; a contract to sell grapes also held assignable; a contract which included language showing the intent that it be nonassignable ; a contract to buy land held to be assignable because approval of title by the buyer was held not to be a personal privilege attaching only to the assignor; and to contracts for personal services.

Neither personal skill nor personal qualities can be conjured as a requirement for the exercise of the option reserved in the deed here, regardless of how ardent may be the desire of the parties (the bankrupt husband-optionee and his sister), “to keep the property in the . . . family." Particularly is this true when a contrary holding would permit the property to be acquired by plaintiff referee in bankruptcy for the benefit of the creditors of the bankrupt husband.

Comment hardly seems necessary on the convenience to a bankrupt of such a device to defeat his creditors. He need only produce parol testimony that any options (or other property, for that matter) which he holds are subject to an oral “collateral agreement" with family members (or with friends) that the property is nontransfer able “in order to keep the property in the family" or in the friendly group. In the present case the value of the ranch which the bankrupt and his wife held an option to purchase has doubtless increased substantially during the years since they acquired the option. The initiation of this litigation by the trustee in bankruptcy to establish his right to enforce the option indicates his belief that there is substantial value to be gained for the creditors from this asset of the bankrupt. Yet the majority opinion permits defeat of the trustee and of the creditors through the device of an asserted collateral oral agreement that the option was “personal” to the bankrupt and nonassignable “in order to keep the property in the family”!14

It also seems appropriate to inquire as to the rights of plaintiff wife in the option which she holds with her bankrupt husband. Is her interest therein also subject to being shown to be personal and not salable or assignable ? And, what are her rights and those of her husband in the ranch land itself, if they exercise their option to purchase it? Will they be free to then sell the land ? Or, if they prefer, may they hold it beyond the reach of creditors? Or can other members of “the family” claim some sort of restriction on it in perpetuity, established by parol evidence?

And if defendants sell the land subject to the option, will the new owners be heard to assert that the option is “personal” to the optionees, “in order to keep the property in the Masterson family”? Or is that claim “personal” to defendants only?

These are only a few of the confusions and inconsistencies which will arise to plague property owners and, incidentally, attorneys and title companies, who seek to counsel and protect them.

I would hold that the trial court ruled correctly on the proffered parol evidence, and would affirm the judgment.

McOomb, J., concurred.

Respondents’ petition for a rehearing was denied March 6, 1968, and the opinion was modified to read as printed above. McOomb, J., and Burke, J., were of the opinion that the petition should be granted.

GURFEIN, Circuit Judge:

This is an appeal by defendant Joseph E. Seagram & Sons, Inc. (“Seagram”) from a judgment entered by the District Court, Hon. Charles H. Tenney, upon the verdict of a jury in the amount of $407,850 in favor of the plaintiffs on a claim asserting common law breach of an oral contract. The court also denied Seagram’s motion under Rule 50(b), Fed.R.Civ.P., for judgment notwithstanding the verdict. Harold S. Lee, et a1. v. Joseph E. Seagram and Sons, 413 F.Supp. 693 (S.D.N.Y.1976). It had earlier denied Seagram’s motion for summary judgment. The plaintiffs are Harold S. Lee (now deceased) and his two sons, Lester and Eric (“the Lees”). Jurisdiction is based on diversity of citizenship.1 We affirm.

The jury could have found the following. The Lees owned a 50% interest in Capitol City Liquor Company, Inc. (“Capitol City”), a wholesale liquor distributorship located in Washington, D.C. The other 50% was owned by Harold’s brother, Henry D. Lee, and his nephew, Arthur Lee. Seagram is a distiller of alcoholic beverages. Capitol City carried numerous Seagram brarfds and a large portion of its sales were generated by Seagram lines.

The Lees and the other owners of Capitol City wanted to sell their respective interests in the business and, in May 1970, Harold Lee, the father, discussed the possible sale of Capitol City with Jack Yogman (“Yogman”), then Executive Vice President of Seagram (and now President), whom he had known for many years. Lee offered to sell Capitol City to Seagram but conditioned the offer on Seagram’s agreement to relocate Harold and his sons, the 50% owners of Capitol City, in a new distributorship of their own in a different city.

About a month later, another officer of Seagram, John Barth, an assistant to Yogman, visited the Lees and their co-owners in Washington and began negotiations for the purchase of the assets of Capitol City by Seagram on behalf of a new distributor, one Carter, who would take it over after the purchase. The purchase of the assets of Capitol City was consummated on September 30, 1970 pursuant to a written agreement. The promise to relocate the father and sons thereafter was not reduced to writing.

Harold Lee had served the Seagram organization for thirty-six years in positions of responsibility before he acquired the half interest in the Capitol City distributorship. From 1958 to 1962, he was chief executive *450officer of Calvert Distillers Company, a wholly-owned subsidiary. During this long period he enjoyed the friendship and confidence of the principals of Seagram.

In 1958, Harold Lee had purchased from Seagram its holdings of Capitol City stock in order to introduce his sons into the liquor distribution business, and also to satisfy Seagram’s desire to have a strong and friendly distributor for Seagram products in Washington, D.C. Harold Lee and Yogman had known each other for 13 years.

The plaintiffs claimed a breach of the oral agreement to relocate Harold Lee’s sons, alleging that Seagram had had opportunities to procure another distributorship for the Lees but had refused to do so. The Lees brought this action on January 18, 1972, fifteen months after the sale of the Capitol City distributorship to Seagram. They contended that they had performed their obligation by agreeing to the sale by Capitol City of its assets to Seagram, but that Seagram had failed to perform its obligation under the separate oral contract between the Lees and Seagram. The agreement which the trial court permitted the jury to find was “an oral agreement with defendant which provided that if they agreed to sell their interest in Capitol City, defendant in return, within a reasonable time, would provide the plaintiffs a Seagram distributorship whose price would require roughly an amount equal to the capital obtained by the plaintiffs for the sale of their interest in Capitol City, and which distributorship would be in a location acceptable to plaintiffs.” No specific exception was taken to this portion of the charge. By its verdict for the plaintiffs, we must assume — as Seagram notes in its brief— that this is the agreement which the jury found was made before the sale of Capitol City was agreed upon.2

Appellant urges several grounds for reversal. It contends that, as a matter of law, (1) plaintiffs’ proof of the alleged oral agreement is barred by the parol evidence rule; and (2) the oral agreement is too vague and indefinite to be enforceable. Appellant also contends that plaintiffs’ proof of damages is speculative and incompetent.

I

Judge Tenney, in a careful analysis of the application of the parol evidence rule, decided that the rule did not bar proof of the oral agreement. We agree.

The District Court, in its denial of the defendant’s motion for summary judgment, treated the issue as whether the written agreement for the sale of assets was an “integrated” agreement not only of all the mutual agreements concerning the sale of Capitol City assets, but also of all the mutual agreements of the parties. Finding the language of the sales agreement “somewhat ambiguous,” the court decided that the determination of whether the parol evidence rule applies must await the taking of evidence on the issue of whether the sales agreement was intended to be a complete and accurate integration of all of the mutual promises of the parties.

Seagram did not avail itself of this invitation. It failed to call as witnesses any of the three persons who negotiated the sales agreement on behalf of Seagram regarding the intention of the parties to integrate all mutual promises or regarding the failure of the written agreement to contain an integration clause.

Appellant contends that, as a matter of law, the oral agreement was “part and parcel” of the subject-matter of the sales contract and that failure to include it in the *451written contract barred proof of its existence. Mitchill v. Lath, 247 N.Y. 377, 380, 160 N.E. 646 (1928). The position of appellant, fairly stated, is that the oral agreement was either an inducing cause for the sale or was a part of the consideration for the sale, and in either case, should have been contained in the written contract. In either case, it argues that the parol evidence rule bars its admission.

Appellees maintain, on the other hand, that the oral agreement was a collateral agreement and that, since it is not contradictory of any of the terms of the sales agreement, proof of it is not barred by the parol evidence rule. Because the case comes to us after a jury verdict we must assume that there actually was an oral contract, such as the court instructed the jury it could find. The question is whether the strong policy for avoiding fraudulent claims through application of the. parol evidence rule nevertheless mandates reversal on the ground that the jury should not have been permitted to hear the evidence. See Fogelson v. Rackfay Constr. Co., 300 N.Y. 334 at 337-38, 90 N.E.2d 881 (1950).

The District Court stated the cardinal issue to be whether the parties “intended” the written agreement for the sale of assets to be the complete and accurate integration of all the mutual promises of the parties. If the written contract was not a complete integration, the court held, then the parol evidence rule has no application.3 We assume that the District Court determined intention by objective standards. See 3 Corbin on Contracts §§ 573-574. The parol evidence rule is a rule of substantive law. Fogelson v. Rackfay Constr. Co., supra; Higgs v. De Maziroff, 263 N.Y. 473, 477,189 N.E. 555 (1934); Smith v. Bear, 237 F.2d 79, 83 (2d Cir. 1956).

The law of New York is not rigid or categorical, but is in harmony with this approach. As Judge Fuld said in Fogelson:

“Decision in each case must, of course, turn upon the type of transaction involved, the scope of the written contract and the content of the oral agreement asserted.”

300 N.Y. at 338, 90 N.E.2d at 883. And the Court of Appeals wrote in Ball v. Grady, 267 N.Y. 470, 472, 196 N.E. 402, 403 (1935):

“In the end, the court must find the limits of the integration as best it may by reading the writing in the light of surrounding circumstances.”

Accord, Fogelson, supra, 300 N.Y. at 338, 90 N.E.2d 881. Thus, certain oral collateral agreements, even though made contemporaneously, are not within the prohibition of the parol evidence rule “because [if] they are separate, indépendent, and complete contracts, although relating to the same subject. • ■ ■ • [t]hey are allowed to be proved by parol, because they were made by. parol, and no part thereof committed to writing.” Thomas v. Scutt, 127 N.Y. 133, 140-41, 27 N.E. 961, 963 (1891).

Although there is New York authority which in general terms supports defendant’s thesis that an oral contract inducing a written one or varying the consideration may be barred, see, e. g., Fogelson v. Rackfay Constr. Co., supra, 300 N.Y. at 340, 90 N.E.2d 881, the overarching question is whether, in the context of the particular setting, the oral agreement was one which the parties would ordinarily be expected to embody in the writing. Ball v. Grady, supra, 267 N.Y. at 470, 196 N.E. 402; accord, Fogelson v. Rackfay Constr. Co., supra, 300 N.Y. at 338, 90 N.E.2d 881. See Restatement on Contracts § 240. For example, integration is most easily inferred in the case of real estate contracts for the sale of land, e. g., Mitchill v. Lath, supra, 247 N.Y. 377, 160 N.E. 646, or leases, Fogelson, supra; Plum Tree, Inc. v. N.K. Winston Corp., 351 F.Supp. 80, 83 (S.D.N.Y.1972). In more complex situations, in which customary business practice may be more varied, an *452oral agreement can be treated as separate and independent of the written agreement even though the written contract contains a strong integration clause. See Gem Corrugated Box Corp. v. National Kraft Container Corp., 427 F.2d 499, 503 (2d Cir. 1970).

Thus, as we see it, the issue is whether the oral promise to the plaintiffs, as individuals, would be an expectable term of the contract for the sale of assets by a corporation in which plaintiffs have only a 50% interest, considering as well the history of their relationship to Seagram.

Here, there are several reasons why it would not be expected that the oral agreement to give Harold Lee’s sons another distributorship would be integrated into the sales contract. In the usual case, there is an identity of parties in both the claimed integrated instrument and in the oral agreement asserted. Here, although it would have been physically possible to insert a provision dealing with only the shareholders of a 50% interest, the transaction itself was a corporate sale of assets. Collateral agreements which survive the closing of a corporate deal, such as employment agreements for particular shareholders of the seller or consulting agreements, are often set forth in separate agreements. See Gem Corrugated Box Corp. v. National Kraft Container Corp., supra, 427 F.2d at 503 (“it is . plain that the parties ordinarily would not embody the stock purchase agreement in a writing concerned only with box materials purchase terms”). It was expectable that such an agreement as one to obtain a new distributorship for certain persons, some of whom were not even parties to the contract, would not necessarily be integrated into an instrument for the sale of corporate assets. As with an oral condition precedent to the legal effectiveness of an otherwise integrated written contract, which is not barred by the parol evidence rule if it is not directly contradictory of its terms, Hicks v. Bush, 10 N.Y.2d 488, 225 N.Y.S.2d 34, 180 N.E.2d 425 (1962); cf. 3 Corbin on Contracts § 589, “it is certainly not improbable that parties contracting in these circumstances would make the asserted oral agreement . . . .” 10 N.Y.2d at 493, 225 N.Y.S.2d at 39, 180 N.E.2d at 428.

Similarly, it is significant that there was a close relationship of confidence and friendship over many years between two old men, Harold Lee and Yogman, whose authority to bind Seagram has not been questioned. It would not be surprising that a handshake for the benefit of Harold’s sons would have been thought sufficient. In point, as well, is the circumstance that the negotiations concerning the provisions of the sales agreement were not conducted by Yogman but by three other Seagram representatives, headed by John Barth. The two transactions may not have been integrated in their minds when the contract was drafted.4

Finally, the written agreement does not contain the customary integration clause, even though a good part of it (relating to warranties and negative covenants) is boilerplate. The omission may, of course, have been caused by mutual trust and confidence, but in any event, there is no such strong presumption of exclusion because of the existence of a detailed integration clause, as was relied upon by the Court of Appeals in Fogeison, supra, 300 N.Y. at 340, 90 N.E. 881.

Nor do we see any contradiction of the terms of the sales agreement. Mitchill v. Lath, supra, 247 N.Y. at 381, 160 N.E. 646; 3 Corbin on Contracts § 573, at 357. The written agreement dealt with the sale of corporate assets, the oral agreement with the relocation of the Lees. Thus, the oral agreement does not vary or contradict the money consideration recited in the contract as flowing to the selling corporation. That is the only consideration recited, and it is *453still the only consideration to the corporation.5

We affirm Judge Tenney’s reception in evidence of the oral agreement and his denial of the motion under Rule 50(b) with respect to the parol evidence rule.

II

Appellant contends, however, that the jury verdict cannot stand because the oral agreement was so vague and indefinite as to be unenforceable. First, appellant argues that the failure to specify purchase price, profitability or sales volume of the distributorship to be provided, is fatal to the contract’s validity. The contention is that, because the oral agreement lacks essential terms, the courts cannot determine the rights and obligations of the parties. See 1 Corbin on Contracts § 95, at 394. Second, appellant contends that the agreement is unenforceable because there were no specific limits to plaintiffs’ discretion in deciding whether to accept or reject a particular distributorship; and hence the agreement was illusory.6

The alleged agreement, as the jury was permitted to find, was to provide the Lees with a liquor distributorship of approximately half the value and profit potential of Capitol City, within a reasonable time. The distributorship would be “in a location acceptable to plaintiffs,” and the price would require roughly an amount equal to the plaintiffs’ previous investment in Capitol City. The performance by plaintiffs in agreeing to the sale of Capitol City caused the counter-performance of the oral promise to mature.

Once the nature of the agreement found by the jury is recognized, it becomes clear that appellant’s contentions are without merit. As for the alleged lack of essential terms, there was evidence credited by the jury, which did establish the purchase price, profitability and sales volume of the distributorship with reasonable specificity. In addition to the direct testimony of the Lees, there was evidence that distributorships were valued, as a rule of thumb, at book value plus three times the previous year’s net profit after taxes. Between this industry standard and the reference to the Capitol City transaction, there was extrinsic evidence to render the parties’ obligations reasonably definite. Professor Corbin has observed that a court should be slow to deny enforcement “if it is convinced that the parties themselves meant to make a ‘contract’ and to bind themselves to render a future performance. Many a gap in terms can be filled, and should be, with a result that is consistent with what the parties said and that is more just to both of them than would be a refusal of enforcement.” Cor-bin on Contracts § 97, at 425-26. New York courts are in accord in hesitating to find that a contract is too indefinite for enforcement. See Borden v. Chesterfield Farms, Inc., 27 A.D.2d 165, 277 N.Y.S.2d 494 (1st Dep’t 1967); Valley Nat’l Bank v. Babylon Chrysler-Plymouth, 53 Misc.2d 1029, 280 N.Y.S.2d 786, aff’d, 28 A.D.2d 1092, 284 N.Y.S.2d 849 (2d Dep’t 1967); Silverman v. Alport, 282 App.Div. 631, 125 N.Y.S.2d 602, 605 (3d Dep’t 1953); Castelli v. Tolibia, 83 N.Y.S.2d 554 (S.Ct.1948), aff’d, 276 App.Div. 1066, 96 N.Y.S.2d 488 (1st Dep’t 1950). The requirement that the al*454leged oral agreement be performed within a reasonable time is particularly unobjectionable, see Valley Nat’l Bank, supra, especially in light of the fact, which Seagram knew, that plaintiffs would have to reinvest the proceeds from the sale of Capitol City within one year or suffer adverse tax consequences.7

As for the alleged unbridled discretion which the oral agreement conferred on the plaintiffs, we similarly conclude that there is no fatal defect. We note at the outset that the requirement that the new distributorship be “acceptable” to the Lees did not render the agreement illusory in the sense that it is not supported by consideration; the Lee’s part of the bargain was to join in the sale of Capitol City’s assets and assignment of its franchise, which they had already performed. More importantly, we do not agree that the Lees had “unbridled” discretion. New York courts would in all events impose an obligation of good faith on the Lees’ exercise of discretion, see. e. g., Wood v. Lucy, Lady Duff-Gordon, 222 N.Y. 88, 118 N.E. 214 (1917), and there was also extrinsic evidence of what would constitute an “acceptable distributorship,” and hence constitute reasonable performance by Seagram. Seagram appears to contend that if it had tendered reasonable performance, by offering an acceptable distributorship to the Lees, that the Lees nevertheless could have found it not “acceptable.” This is not correct. It is true that Seagram could not have forced the Lees to take a distributorship, because they had not promised to do so. But Seagram’s tender of reasonable performance would discharge its obligations under the oral agreement, whether or not the Lees “accepted.” See 15 Williston on Contracts §§ 1808-10 (3d ed. 1972). The Lees could not prevent Seagram from fulfilling its obligations by unreasonably refusing an acceptable distributorship. Since the obligations of the parties under the contract therefore were ascertainable, it was not void for indefiniteness. Cf. Mason v. Rose, 176 F.2d 486, 489 (2d Cir. 1949).

Ill

The jury awarded the two sons and the estate of the father damages in the amount of $407,850. The essence of the court’s charge on the subject was that in a contract action the basic principle of damages “is to indemnify a plaintiff for the gains prevented and the losses sustained by a defendant’s breach, to leave him no worse but in no better position than he would have been had the breach not occurred.” The court charged that the jury was to determine the reasonable value of the injury, if any. It charged further that “from the sum thus arrived at, you will then deduct such amount, if any, as from the evidence you find fairly measures the benefit to plaintiffs resulting from the fact that plaintiffs were freed to engage their services and capital in other situations during the time they would otherwise have been engaged in the management of an investment in the alleged promised distributorship.”

Plaintiffs introduced testimony by Ernest L. Sommers, a certified public accountant, whom the District Court found to be qualified as an expert. Sommers compared one-half of the profits of Capitol City in its last fiscal year ending June 1, 1970 on the theory that profits for the past five years showed an upward trend, with the amount earned on investments in bonds by the plaintiffs in the year succeeding the sale. He found that one-half of the Capitol City pre-tax profits, based on one-half the sales price, amounted to 14.508%. The return on the bond investment was 7.977%. He then subtracted the percentage return *455on the investment bonds from the percentage return of the Capitol City operation, which gave him a percentage figure for the loss occasioned by the breach, of 6.531%. This figure, applied to one-half the sales price, came to $83,800 per annum before taxes. Multiplying this figure by only ten years — an assumed minimum measure for the life of the “new” distributorship— would make an $838,000 total loss. Discounting to present value, the witness reduced the figure to $549,000. The jury returned a verdict, as we have seen, for a lesser amount, $407,850. There is, therefore, no element of damage in the verdict amount for which no evidence was submitted to the jury. See Locke v. United States, 283 F.2d 521, 151 Ct.Cl. 262 (1960). Appellant contends, however, that plaintiffs’ proof of damages was speculative and incompetent.

Appellant’s position is based in large measure on some confusion about the precise nature of the agreement found by the jury, see notes 2 and 7 supra. Plaintiffs’ evidence bore directly on the damages sustained by breach of a contract to provide a distributorship of one-half the cost and worth of Capitol City, and on the “fair measure” of the sums properly deducted. Appellant’s contention that plaintiffs should have been required to prove, as a sine qua non to any damage award, that there was a Seagram distributor actually willing to sell his distributorship to them, is without merit. The oral agreement, as the jury was permitted to find, was for Seagram to provide a distributorship for the Lees. The jury was permitted to find that Seagram could have fulfilled this obligation by steering a voluntary sale of a distributorship to the plaintiffs or could have financed an intermediate transaction, warehousing the acquired distributorship for the plaintiffs, see note 2 supra.

Seagram contends that lost profits are not the proper measure of damages for breach of contract, and that cases allowing damages for destruction of injury to an ongoing business are not controlling. Lost profits can, however, be a proper measure of damages for breach of contract. As the Court of Appeals for the First Circuit said in Standard Machinery Co. v. Duncan Shaw Corp,, 208 F.2d 61, 64:

“Certainly no authority need be cited for the broad proposition that prospective profits, if proved, are an element of a plaintiff’s damages for breach of contract, or for the further proposition that evidence of past profits from an established business provides a reasonable basis for estimating future profits from the business.”

See Perma Research & Devel. Co. v. Singer Co., 402 F.Supp. 881, 898 (S.D.N.Y.1975), aff’d, 542 F.2d 111 (2d Cir. 1976); For Children, Inc. v. Graphics Int’l, Inc., 352 F.Supp. 1280, 1284 (S.D.N.Y.1972). This is so even if the prospective business has not yet begun operation. See For Children, Inc., supra, 352 F.Supp. at 1284; William Goldman Theatres v. Loew’s, Inc., 69 F.Supp. 103, 105-06 (E.D.Pa.1946), aff’d, 164 F.2d 1021 (3d Cir.), cert. denied, 334 U.S. 811, 68 S.Ct. 1016, 92 L.Ed. 1742 (1948).

Seagram objects to the fact that plaintiffs’ proof concerned the profit experience of Capitol City. It suggests that the best way of determining profits would be to consider the profits of an existing distributorship. But it came forward with no such proof, presumably for tactical reasons. We hold that the method of proof used by the plaintiffs was adequate in the circumstances. Since Seagram’s breach has made difficult a more precise proof of damages, it must bear the risk of uncertainty created by its conduct. Bigelow v. RKO Radio Pictures, 327 U.S. 251, 264-65, 66 S.Ct. 574, 90 L.Ed. 652 (1946); Story Parchment Co. v. Paterson Parchment Paper Co., 282 U.S. 555, 563, 51 S.Ct. 248, 75 L.Ed. 544 (1931); Eastman Kodak Co. v. Southern Photo Co., 273 U.S. 359, 379, 47 S.Ct. 400, 71 L.Ed. 684 (1929); Perma Research & Devel. Co. v. Singer Co., 542 F.2d 111, 116 (2d Cir. 1976); Autowest, Inc. v. Peugeot, Inc., 434 F.2d 556, 565 (2d Cir. 1970); For Children, Inc. v. *456Graphics Int’I, Inc., 352 F.Supp. 1280, 1284 (S.D.N.Y.1972). New York law is in accord. Spitz v. Lesser, 302 N.Y. 490, 99 N.E.2d 540 (1951). As the court said in Wakeman v. Wheeler Mfg. Co., 101 N.Y. 205, 209, 4 N.E. 264, 266 (1886):

“When it is certain that damages have been caused by a breach of contract, and the only uncertainty is as to their amount, there can rarely be good reason for refusing, on account of such uncertainty, any damages whatever for the breach. A person violating his contract should not be permitted entirely to escape liability because the amount of damages which he has caused is uncertain.”

Accord, Randall-Smith v. 43rd Street Estates Corp., 17 N.Y.2d 99, 105-06, 268 N.Y. S.2d 306,215 N.E.2d 494 (1976); cf. Herman Schwabe, Inc. v. United Shoe Machinery Co., 297 F.2d 906 (2d Cir. 1962).

Mere dispute on the validity of some of the figures cannot wipe out the evidence but merely emphasizes that the jury was presented with a factual question whose determination we should not change. See Washington State Bowling Proprietors Ass’n v. Pacific Lanes, Inc., 356 F.2d 371, 379 (9th Cir. 1966). “The trial court has a large amount of discretion in determining whether to submit the question of profits to the jury; and when it is so submitted, the jury will also have a large amount of discretion in determining the amount of its verdict.” 5 Corbin on Contracts § 1022, at 145-46. Cf. Herman Schwabe, supra, 297 F.2d at 912.

Affirmed.

Markman, RJ.

Defendants appeal as of right a trial court order granting summary disposition to plaintiff on its claims of breach of contract, conversion, and *488fraud. Defendants also appeal as of right the trial court’s denial of their motion for summary disposition. We reverse and remand for determination of damages pursuant to the liquidated damages formula set forth in the contract.

PACTS

In December 1993, plaintiff entered into a contract with Carol Management Corporation (CMC) for the use of its property, Doral Resort and Country Club, for a convention scheduled in October 1994. The “letter of agreement” included a merger clause that stated that such agreement constituted “a merger of all proposals, negotiations and representations with reference to the subject matter and provisions.” The letter of agreement did not contain any provision requiring that Doral Resort employees be union-represented. However, plaintiff contends in its appellate brief that it signed the letter of agreement in reliance on an “independent, collateral promise to provide [plaintiff] with a union-represented hotel.” Plaintiff provided the affidavits of Herschel Nix, plaintiff’s agent, and Barbara Roush, CMC’s agent, who negotiated the contract. In his affidavit, Nix states that during the contract negotiation he and Roush discussed plaintiff’s requirement that the hotel employees be union-represented and that Roush agreed to this requirement. In her affidavit, Roush states that “prior to and at the time” the contract at issue was negotiated she “was well aware” of plaintiff’s requirement that the hotel employees be union-represented and that “that there is no doubt that I agreed on behalf of the Doral Resort to provide *489a union hotel.”1 The letter of agreement also included a liquidated damages clause in the event plaintiff canceled the reservation “for any reason other than the following: Acts of God, Government Regulation, Disaster, Civil Disorders or other emergencies making it illegal to hold the meeting/convention.”

Later in December 1993, the hotel was sold to defendants, who subsequently replaced the resort’s union employees with a nonunionized work force.2 In June 1994, when plaintiff learned that the hotel no longer had union employees, it canceled the contract and demanded a refund of its down payment. Defendants refused to refund the down payment, retaining it as a portion of the liquidated damages allegedly owed to them pursuant to the contract. Plaintiff filed suit for return of the down payment and asserted claims of breach of contract, conversion of the deposit, and fraud. Defendants filed a counterclaim and moved for summary disposition and enforcement of the liquidated damages clause. Plaintiff filed a cross-motion *490for summary disposition. The trial court granted plaintiffs motion for summary disposition regarding the breach of contract count on the basis of its determination that there was a separate agreement requiring that the hotel employees be union-represented. It also granted plaintiffs motion for summary disposition on the conversion and fraud counts.

This Court reviews decisions on motions for summary disposition de novo to determine if the moving party was entitled to judgment as a matter of law. Stehlik v Johnson (On Rehearing), 206 Mich App 83, 85; 520 NW2d 633 (1994).

MCR 2.116(C)(8) permits summary disposition when the opposing party has failed to state a claim upon which relief can be granted. A motion under this subsection determines whether the opposing party’s pleadings allege a prima facie case. The court must accept as true all well-pleaded facts. Only if the allegations fail to state a legal claim is summary disposition pursuant to MCR 2.116(C)(8) valid. . . . MCR 2.116(C)(10) permits summary disposition when, except for the amount of damages, there is no genuine issue concerning any material fact and the moving party is entitled to [judgment] as a matter of law. A court reviewing such a motion must consider the pleadings, affidavits, depositions, admissions, and any other evidence in favor of the opposing party and grant the benefit of any reasonable doubt to the opposing party. [Id.]

MERGER CLAUSE

Defendants claim that the trial court erred in granting plaintiffs motion for summary disposition and in denying defendants’ motion for summary disposition. Regarding the breach of contract count, they specifically contend that parol evidence of a separate agreement providing that the hotel would have union *491employees at the time of the convention was inadmissible because the letter of agreement included an express merger clause.

We begin by reiterating the basic rules regarding contract interpretation. “The primary goal in the construction or interpretation of any contract is to honor the intent of the parties.” Rasheed v Chrysler Corp, 445 Mich 109, 127, n 28; 517 NW2d 19 (1994).

“We must look for the intent of the parties in the words used in the instrument. This court does not have the right to make a different contract for the parties or to look to extrinsic testimony to determine their intent when the words used by them are clear and unambiguous and have a definite meaning.” [Sheldon-Seatz, Inc v Coles, 319 Mich 401, 406-407; 29 NW2d 832 (1947), quoting Michigan Chandelier Co v Morse, 297 Mich 41, 49; 297 NW 64 (1941).]

In Port Huron Ed Ass’n v Port Huron Area School Dist, 452 Mich 309, 323; 550 NW2d 228 (1996), the Court stated:

The initial question whether contract language is ambiguous is a question of law. If the contract language is clear and unambiguous, its meaning is a question of law. Where the contract language is unclear or susceptible to multiple meanings, interpretation becomes a question of fact. [Citations omitted.]

A contract is ambiguous if “its words may reasonably be understood in different ways.” Raska v Farm Bureau Ins Co, 412 Mich 355, 362; 314 NW2d 440 (1982). Courts are not to create ambiguity where none exists. Smith v Physicians Health Plan, Inc, 444 Mich 743, 759; 514 NW2d 150 (1994). “Contractual language is construed according to its plain and ordinary meaning, and technical or constrained con*492structions are to be avoided.” Dillon v DeNooyer Chevrolet Geo, 217 Mich App 163, 166; 550 NW2d 846 (1996). If the meaning of an agreement is ambiguous or unclear, the trier of fact is to determine the intent of the parties. Chrysler Corp v Brencal Contractors, Inc, 146 Mich App 766, 775; 381 NW2d 814 (1985).

The parol evidence rule may be summarized as follows: “[p]arol evidence of contract negotiations, or of prior or contemporaneous agreements that contradict or vary the written contract, is not admissible to vary the terms of a contract which is clear and unambiguous.” Schmude Oil Co v Omar Operating Co, 184 Mich App 574, 580; 458 NW2d 659 (1990). This rule recognizes that in “[b]ack of nearly every written instrument lies a parol agreement, merged therein.” Lee State Bank v McElheny, 227 Mich 322, 327; 198 NW 928 (1924). “The practical justification for the rule lies in the stability that it gives to written contracts; for otherwise either party might avoid his obligation by testifying that a contemporaneous oral agreement released him from the duties that he had simultaneously assumed in writing.” 4 Williston, Contracts, § 631. In other words, the parol evidence rule addresses the fact that “disappointed parties will have a great incentive to describe circumstances in ways that escape the explicit terms of their contracts.” Fried, Contract as Promise (Cambridge: Harvard University Press, 1981) at 60.

However, parol evidence of prior or contemporaneous agreements or negotiations is admissible on the threshold question whether a written contract is an integrated instrument that is a complete expression of the parties’ agreement. In re Skotzke Estate, 216 Mich App 247, 251-252; 548 NW2d 695 (1996); NAG Enter*493prises, Inc v All State Industries, Inc, 407 Mich 407, 410-411; 285 NW2d 770 (1979). The NAG Court noted four exceptions to the parol evidence rule, stating that extrinsic evidence is admissible to show (1) that the writing was a sham, not intended to create legal relations, (2) that the contract has no efficacy or effect because of fraud, illegality, or mistake, (3) that the parties did not integrate their agreement or assent to it as the final embodiment of their understanding, or (4) that the agreement was only partially integrated because essential elements were not reduced to writing. NAG, supra at 410-411. See also 4 Willis-ton, Contracts, § 631. Importantly, neither NAG nor Skotzke involved a contract with an explicit integration clause.

The first issue before us is whether parol evidence is admissible with regard to the threshold question of integration even when the written agreement includes an explicit merger or integration clause. In other words, the issue is whether NAG applies to allow parol evidence regarding this threshold issue when a contract includes an explicit merger clause. While this issue is one of first impression, its answer turns on well-established principles of contract law. Willis-ton on Contracts and Corbin on Contracts offer specific guidance regarding this issue. 4 Williston, Contracts, § 633, p 1014 states in pertinent part:

Since it is only the intention of the parties to adopt a writing as a memorial which makes that writing an integration of the contract, and makes the parol evidence rule applicable, any expression of their intention in the writing in regard to the matter will be given effect. If they provide in terms that the writing shall be a complete integration of their agreement . . . the expressed intention will be effectuated.

*4943 Corbin, Contracts, § 578, pp 402-411 states in pertinent part:

If a written document, mutually assented to, declares in express terms that it contains the entire agreement of the parties . . . this declaration is conclusive as long as it has itself not been set aside by a court on grounds of fraud or mistake, or on some ground that is sufficient for setting aside other contracts. ... It is just like a general release of all antecedent claims.

* * *

... An agreement that we do now discharge and nullify all previous agreements and warranties is effective, so long as it is not itself avoided. . . .

... By limiting the contract to the provisions that are in writing, the parties are definitely expressing an intention to nullify antecedent understandings or agreements. They are making the document a complete integration. Therefore, even if there had in fact been an antecedent warranty or other provision, it is discharged by the written agreement.

Thus, both Corbin and Williston indicate that an explicit integration clause is conclusive and that parol evidence is not admissible to determine whether a contract is integrated when a written contract contains such a clause.3 In the context of an explicit integration clause, Corbin recognizes exceptions to the *495barring of parol evidence only for fraud (or other grounds sufficient to set aside a contract) and for the rare situation when the written document is obviously incomplete “on its face” and, therefore, parol evidence is necessary “for the filling of gaps.” Id. The conclusion that parol evidence is not admissible to show that a written agreement is not integrated when the agreement itself includes an integration clause is consistent with the general contract principles of honoring parties’ agreements as expressed in. their written contracts and not creating ambiguities where none exist.4 See Rasheed, supra at 127, n 28; Sheldon-Seatz, supra at 406-407; Smith, supra at 759. This conclusion accords respect to the rules that the parties themselves have set forth to resolve controversies arising under the contract. The parties are bound by the contract because they have chosen to be so bound.

Further, and most fundamentally, if parol evidence were admissible with regard to the threshold issue whether the written agreement was integrated despite the existence of an integration clause, there would be little distinction between contracts that include an integration clause and those that do not. When the parties choose to include an integration clause, they clearly indicate that the written agreement is integrated; accordingly, there is no longer any “threshold *496issue” whether the agreement is integrated and, correspondingly, no need to resort to parol evidence to resolve this issue.5 Thus NAG, which allows resort to parol evidence to resolve this “threshold issue,” does not control when a contract includes a valid merger clause. 3 Corbin, Contracts, § 577, p 401 states in pertinent part:

A finding that the parties had assented to a writing as the complete integration of their then existing agreement is necessarily a finding that there is no simultaneous oral addition. On such a finding of fact, we are no longer required to decide whether proof of simultaneous oral agreement is admissible, for we have just found that there was no such oral agreement.

The conclusion that parol evidence is not admissible regarding this “threshold issue” when there is an *497explicit integration clause honors the parties’ decision to include such a clause in their written agreement. It gives effect to their decision to establish a written agreement as the exclusive basis for determining their intentions concerning the subject matter of the contract.

This rule is especially compelling in cases such as the present one, where defendants, successor corporations, assumed performance of another corporation’s obligations under a letter of agreement. Because defendants were not parties to the negotiations resulting in the letter of agreement, they would obviously be unaware of any oral representations made by cmc’s agent to plaintiff’s agent in the course of those negotiations. Defendants assumed cmc’s obligations under the letter of agreement, which included an explicit merger clause. Defendants could not reasonably have been expected to discuss with every party to every contract with CMC whether any parol agreements existed that would place further burdens upon defendants in the context of a contract with an explicit merger clause. Under these circumstances, it would be fundamentally unfair to hold defendants to oral representations allegedly made by cmc’s agent. Of the participants involved in this controversy, defendants are clearly the least blameworthy and the least able to protect themselves. Unlike plaintiff, which could have addressed its concerns by including appropriate language in the contract, and unlike CMC, which allegedly agreed to carry out obligations not included within the contract, defendants did nothing more than rely upon the express language of the instant contract, to wit, that the letter of agreement represented the full understanding between plaintiff *498and CMC. We believe that defendants acted reasonably in their reliance and that the contract should be interpreted in accordance with its express provisions.

We find little Michigan authority discussing the parol evidence rule in the context of contracts that include integration clauses.6 In McCray Refrigerator & Cold Storage Co v Woods & Zent, 99 Mich 269, 271-272; 58 NW 320 (1894), the Court stated that where a written agreement (that included an integration clause) was silent regarding the subject of warranty, a warranty could not be proved by parol evidence. In In re Backofen Estate, 157 Mich App 795, 800; 404 NW2d 675 (1987), this Court found that the parol evidence rule did not bar testimony regarding the circumstances under which a loan transaction occurred because the contract terms were not in dispute and the contract did not contain an integration clause that would have invoked the parol evidence rule. In Ditzik v Schaffer Lumber Co, 139 Mich App 81, 88-89; 360 NW2d 876 (1984), this Court held that the trial court erroneously admitted extrinsic evidence of a course of conduct because it contradicted “the unambiguous language and body of the fully integrated agreement” and specifically noted that the written agreement included an integration clause. These three cases indicate that an integration clause precludes admission of parol evidence that contradicts the written agreement. None of them specifically addresses the issue whether extrinsic evidence is admissible to demonstrate that a written agreement is not integrated *499despite an explicit integration clause. However, evidence of any prior or contemporaneous parol agreements would clearly contradict the integration clause itself in a written agreement because an integration clause nullifies all antecedent agreements. 3 Corbin, Contracts, § 578.

We are aware of two Michigan decisions suggesting that parol evidence may, under some circumstances, be admissible to vary the terms of a written agreement despite the existence of an integration clause, Central Transport, Inc v Fruehauf Corp, 139 Mich App 536; 362 NW2d 823 (1984), and Van Pembrook v Zero Mfg Co, 146 Mich App 87, 98; 380 NW2d 60 (1985). We have reviewed these decisions with great interest because they seem to be contrary to Corbin, Williston, and the Supreme Court’s statements regarding the matter. With respect to Fruehauf, we conclude that while the decision does contain some rather opaque language, it is consistent with the rule set forth above. With respect to Van Pembrook, we conclude that it suggests that parol evidence may be used to vary the terms of a written agreement despite the existence of an integration clause, and we accordingly decline to follow Van Pembrook.

In Fruehauf, at issue were several lease agreements containing integration clauses. The plaintiff contended that, before or contemporaneously with the execution of the leases, the defendant orally agreed to transfer the subject matter of the leases to the plaintiff for a nominal fee at the end of the lease term. In other words, the plaintiff argued that the agreements were essentially “lease-purchase” or, more colloquially, “rent-to-own,” agreements, with the lease components set forth in writing and the *500purchase components agreed to orally. The leases themselves reflected no purchase component, each being a fairly straightforward lease and stating simply that “[t]his instrument contains the entire agreement between the parties pertaining to the subject matter hereof.” The defendant maintained that no agreements beyond those set forth in the leases had ever been entered into, and, further, argued that in light of the integration clauses in the leases, no parol evidence could properly be heard regarding the plaintiffs contention. The Fruehauf Court cited NAG and noted that the trial court in Fruehauf considered evidence beyond the explicit integration clause in the agreements in determining that the written agreements were integrated. Plaintiff interprets Fruehauf as tacitly approving the consideration of parol evidence regarding integration despite the existence of an explicit integration clause. However, Fruehauf did not affirmatively address the issue whether extrinsic evidence was admissible to demonstrate that a contract was not fully integrated in the face of an explicit integration clause. Rather, it observed, in response to the plaintiff’s arguments to the contrary, that the trial court had looked to extrinsic evidence, in addition to the integration clause, to determine whether the agreement was integrated; but it did not specifically approve this use of parol evidence by the trial court. Such an analysis by the trial court, when it ultimately upheld the integration clause, constitutes at worst a needless exercise. The Fruehauf Court said nothing to affirm the propriety of looking to extrinsic evidence in the face of an express integration clause, much less anything to compel such an analysis.

*501In Van Pembrook, the plaintiff agreed to become a sales representative for the defendant, and entered into a written agreement to this effect that contained a merger clause. Later, the plaintiff brought suit, alleging that the defendant had breached the contract. The defendant failed to properly defend the action, and a default judgment was entered. The defendant then made various arguments attacking the trial court’s failure to set aside the default judgment and, in the alternative, challenged the amount of damages awarded. In the context of determining the amount of damages, the trial court relied on testimony of the plaintiff in which he stated that the defendant had represented that he would earn “net profits of $10,000 to $15,000 a year.” Van Pembrook, supra at 97. Because no such guarantee was included in the written agreement, the defendant contended that the court could not properly consider the plaintiff’s testimony with regard to this issue.

The Van Pembrook Court relied on Stimac v Wissman, 342 Mich 20, 25-26; 69 NW2d 151 (1955), for the propositions that the parol evidence rule does not preclude evidence of a prior or contemporaneous parol agreement that “does not interfere with the terms of the written contract” and that evidence of a collateral agreement is admissible where such agreement was an inducement for entering into the contract. However, this reliance was misplaced because Stimac addressed written contracts that were not fully integrated while Van Pembrook involved a contract with a merger clause. The Van Pembrook Court held that extrinsic evidence, demonstrating that the defendant’s representative made false representations upon which the plaintiff relied to his detriment, was *502admissible because it was not used to vary the terms of the written contract but to show the circumstances under which the parties entered into it. Van Pembrook, supra at 98. Parol evidence generally may be considered to determine whether fraud occurred under the second exception to the parol evidence rule discussed in NAG, supra at 410-411. However, a contract with a merger clause nullifies all antecedent claims. See 3 Corbin, Contracts, § 578. In our view, this includes any collateral agreements that were allegedly an inducement for entering into the contract. In the context of a contract that included a merger clause, parol evidence regarding false representations in a collateral agreement that induced the plaintiff to enter into the contract would vary the terms of the contract. The Van Pembrook Court, in our judgment, erred in finding otherwise. Its decision failed to discuss or accord any meaning to the merger clause that the parties freely chose to include in their contract. Accordingly, we believe that Van Pembrook was wrongly decided.

For these reasons, we hold that when the parties include an integration clause in their written contract, it is conclusive and parol evidence is not admissible to show that the agreement is not integrated except in cases of fraud that invalidate the integration clause or where an agreement is obviously incomplete “on its face” and, therefore, parol evidence is necessary for the “filling of gaps.” 3 Corbin, Contracts, § 578, p 411.

FRAUD

Because plaintiff made fraud allegations here, we will consider the effect of such allegations on a con*503tract with a merger clause. “Fraud . . . makes a contract voidable at the instance of the innocent party.” 3 Corbin, Contracts, § 580, p 431; see also NAG, supra at 410-411. Parol evidence is generally admissible to demonstrate fraud. 3 Corbin, Contracts, § 580; NAG, supra at 410-411. However, in the context of an integration clause, which releases all antecedent claims, only certain types of fraud would vitiate the contract. 3 Corbin, Contracts, § 578, p 411, states in part:

To establish fraud, it is not sufficient merely to show that the writing states that there was no antecedent agreement when the fact is that there had been one. If by artifice or concealment, one party induces the other to suppose that the antecedent agreement is included in the writing, or to forget that agreement and to execute an incomplete writing, while describing it as complete, the written provision may be voidable on the ground of fraud.

In other words, while parol evidence is generally admissible to prove fraud, fraud that relates solely to an oral agreement that was nullified by a valid merger clause would have no effect on the validity of the contract. Thus, when a contract contains a valid merger clause, the only fraud that could vitiate the contract is fraud that would invalidate the merger clause itself, i.e., fraud relating to the merger clause or fraud that invalidates the entire contract including the merger clause. 3 Corbin, Contracts, § 578.7

*504Here, defendants contended that the contract was fully integrated and presented the letter of agreement with its express and unambiguous merger clause as evidence. Plaintiff presented the affidavits of Nix and Roush in support of its argument that the letter of agreement was not fully integrated because the alleged agreement providing that the hotel would have union employees at the time of the convention was not reduced to writing. In its fraud count, plaintiff contends that Roush’s representations that the hotel would have union employees and her failure to inform plaintiff of the impending sale of the hotel constituted fraud.8 These fraud claims turn on an alleged agreement that the hotel employees would be union-represented. However, the merger clause would nullify any such agreement not included in the letter of agreement. The various species of fraud alleged here all require reliance on a misrepresentation. See Mitchell v Dahlberg, 215 Mich App 718, 723; 547 NW2d 74 (1996) (fraud); McMullen v Joldersma, 174 Mich App 207, 213; 435 NW2d 428 (1988) (silent fraud); United States Fidelity & Guaranty Co v Black, 412 Mich 99, 116; 313 NW2d 77 (1981) (innocent misrepresentation). Here, the merger clause made it unreasonable for plaintiff’s agent to rely on any representations not included in the letter of agreement. Any injury suffered by plaintiff appears to have resulted from its agent’s failure to include a requirement that hotel employees be union-represented in the integrated letter of agreement rather than from reliance on any misrepresentations *505by Roush. Thus, the allegations in plaintiffs fraud count are not the type of fraud claims that could invalidate a contract with a valid merger clause.9

Plaintiff made no allegations of fraud that would invalidate the contract or the merger clause itself. Nix, plaintiffs agent, had over seven years’ experience in negotiating contracts for such conventions as demonstrated by his own affidavit. There is no allegation that he was defrauded regarding the integration clause or defrauded into believing that the written contract included a provision requiring the hotel to use union-represented employees when it did not. In his affidavit, he states that in a 1991 letter of agreement with the same hotel, provisions were made for the hotel to provide bus transportation with union drivers. This evidence demonstrates that the plaintiff’s agent knew how to include agreements regarding the union status of employees in a written contract, had done so in the past when negotiating with CMC, and yet apparently decided not to include any such agreement here. In light of the obvious impor*506tance of this issue to plaintiff, it is difficult to understand why an agreement regarding the union status of employees was not included in the same way in the instant agreement.10 Instead, the letter of agreement contained no such provision and included a clear integration clause. 11 The written agreement is detailed and complete on its face, see 3 Corbin, Contracts, § 578,12 and its words are unambiguous, see Raska, *507supra at 362; Smith, supra at 759. There is no indication that the integration clause itself is void for any reason. Accordingly, as a matter of law, parol evidence was not admissible here to contradict the explicit integration clause.13 Therefore, we hold that the trial court erred in granting plaintiffs motion for summary disposition and equally erred in denying defendants’ motion for summary disposition.14

*508LIQUIDATED DAMAGES

Defendants also argue that the trial court should have awarded liquidated damages to them pursuant to the contract. Although the court granted summary disposition to plaintiff, it further indicated that liquidated damages “would be inappropriate.” A liquidated damages provision is simply an agreement by the parties fixing the amount of damages in case of a breach. Papo v Aglo Restaurants of San Jose, Inc, 149 Mich App 285, 294; 386 NW2d 177 (1986). Whether such a provision is valid and enforceable or invalid as a penalty is a question of law. Moore v St Clair Co, 120 Mich App 335, 339; 328 NW2d 47 (1982). The courts are to sustain such provisions if the amount is “reasonable with relation to the possible injury suffered” and not “unconscionable or excessive.” Id. at 340, citing Curran v Williams, 352 Mich 278, 282; 89 NW2d 602 (1958). Here, the liquidated damages clause fixed the amount of damages at sixty-five percent of the “total room, food and beverage revenue for the entire stay” for a cancellation 90-180 days before the sched*509uled event.15 This provision also included a promise by defendants to mitigate damages by “makfing] every effort to” rerent the facilities. This formula, negotiated by the parties, appears reasonable in relation to defendants’ potential injury if plaintiff canceled and thus does not appear to be an invalid penalty. Accordingly, the trial court erred in ruling that it was an invalid liquidated damages provision. We therefore remand for a determination of liquidated damages due under the liquidated damages provision of the letter of agreement.

Finally, we will briefly respond to the dissenting opinion. The dissenting opinion indicates in n 3, post at 517, that no contract existed between plaintiff and defendants. Initially, we note that the parties themselves, unlike the dissent, have not suggested that no contract existed between plaintiff and defendants. In fact, the parties clearly assume that the letter of agreement is binding on them; they only disagree regarding its meaning and the effect of the alleged oral representations regarding union representation of the staff. While this Court may, of course, address essential issues not raised by the parties, we are perplexed by the dissent’s reliance upon an argument that is inconsistent with the parties’ positions to dispose of this matter.

Restatement Contracts, 2d, § 318, p 19, states that “[a]n obligor can properly delegate the performance of his duty to another unless the delegation is con*510trary to public policy or the terms of his promise.” The principal exceptions to such delegation of a contractual duty relate to “contracts for personal services and to contracts for the exercise of personal skill or discretion.” Id. at comment c. 3 Williston, Contracts, § 411, p 20 similarly provides that an obligor may delegate a contractual duty “provided the duty does not require personal performance.” Further, it states that personal performance will not be implied in the absence of an express agreement “if the duty is of such character that performance by an agent will be substantially the same thing as performance by the obligor himself.” Id. 4 Corbin, Contracts, § 865, also indicates that unless personal performance is required by a contract, an obligor may discharge his duties under a contract by vicarious performance.

Here, the duty at issue is the provision of hotel facilities for a convention. This duty is of a character that easily lends itself to substituted performance. It is far removed from traditional personal service contracts such as an artist’s contract to paint a portrait or a doctor’s contract to perform complicated surgery. The provision of hotel facilities here does not include any genuine expectation of personal performance, whether for the maintenance of the rooms or conference facilities, the preparation of meals, or the provision of bellhop or valet services. There is utterly nothing in the character of the services at issue or in the contract language itself that indicates that personal performance of any sort was required.16

*511In addition, the letter of agreement itself between the parties specifically stated: “This contract shall be binding on and for the benefit of the parties and their successors.” (Emphasis supplied.) Such language “tends to indicate that the promised performance is not personal.” Restatement Contracts, 2d, § 323, p 35, comment b. See also 4 Corbin, Contracts, § 871. Accordingly, we remain convinced that CMC was free to assign its rights and delegate its duties under the letter of agreement to defendants. To construe an altogether typical contract for hotel services as one involving personal services would be to impair the general rule allowing the delegation of contractual duties by enabling the personal services exception to consume the rule.

Reversed and remanded for proceedings consistent with this opinion. We do not retain jurisdiction.

O’Connell, J., concurred.

Holbrook, Jr., J.,

(dissenting). I respectfully dissent.

The event that precipitated this legal dispute was Carol Management’s sale of the resort to defendants, without informing plaintiff during contract negotiations that the resort was for sale or that a sale was pending, and defendants’ subsequent firing of the resort’s union staff, less than one month after the contract with plaintiff was negotiated and signed. The contract — drafted by Carol Management — included a standardized integration or merger clause, but was silent regarding plaintiff’s acknowledged requirement *512that the resort employ a union-represented staff. Attempts to pigeonhole these unusual facts into established black-letter rules of contract law lead to harsh and unintended results. Hard cases do, indeed, make bad law.1

The contract’s merger clause — “a merger of all proposals, negotiations and representations with reference to the subject matter and provisions” — appears plain and unambiguous. While it is often stated that courts may not create an ambiguity in a contract where none exists, and that parol evidence is generally not admissible to vary or contradict the terms of a written contract, Professor Corbin acknowledges that strict adherence to these rules can be problematic:

The fact that the [parol evidence] rule has been stated in such a definite and dogmatic form as a rule of admissibility is unfortunate. It has an air of authority and certainty that has grown with much repetition. Without doubt, it has deterred counsel from making an adequate analysis and research and from offering parol testimony that was admissible for many purposes. Without doubt, also it has caused a court to refuse to hear testimony that ought to have been heard. The mystery of the written word is still such that a paper document may close the door to a showing that it was never assented to as a complete integration.

No injustice is done by exclusion of the testimony if the written integration is in fact what the court assumes or decides that it is. . . .

The trouble is that the court’s assumption or decision as to the completeness and accuracy of the integration may be quite erroneous. The writing cannot prove its own completeness and accuracy. Even though it contains an *513express statement to that effect, the assent of the parties thereto must still be proved. Proof of its completeness and accuracy, discharging all antecedent agreements, must be made in large part by the oral testimony of parties and other witnesses. The very testimony that the “parol evidence rule” is supposed to exclude is frequently, if not always, necessary before the court can determine that the parties have agreed upon the writing as a complete and accurate statement of terms. The evidence that the rule seems to exclude must sometimes be heard and weighed before it can be excluded by the rule. This is one reason why the working of this rule has been so inconsistent and unsatisfactory. This is why so many exceptions and limitations to the supposed rule of evidence have been recognized by various courts.

There is ample judicial authority showing that, in determining the issue of completeness of the integration in writing, evidence extrinsic to the writing itself is admissible. The oral admissions of the plaintiff that the agreement included matters not contained in the writing may be proved to show that it was not assented to as a complete integration, however complete it may look on its face. On this issue, parol testimony is certainly admissible to show the circumstances under which the agreement was made and the purposes for which the instrument was executed. [3 Corbin, Contracts, § 582, pp 447-451 (emphasis added).]

And, in § 583 of his treatise, Professor Corbin continues:

No written document can prove its own execution or that it was ever assented to as a complete integration, supplanting and discharging what preceded it. . . . There are plenty of decisions that additional terms and provisions can be proved by parol evidence, thereby showing that the written document in court is not a complete integration. This is true, even though it is clear that the additional terms form a part of one contractual transaction along with the writing. [3 Corbin on Contracts, § 583, pp 465-467.]

*514Accord Stimac v Wissman, 342 Mich 20, 26-27; 69 NW2d 151 (1955) (extrinsic evidence was admissible regarding a collateral independent promise so as to give full effect to the intent of the contracting parties); Restatement Contracts, 2d, § 216, comment e, p 140 (observing that a merger “clause does not control the question of whether the writing was assented to as an integrated agreement”).

The fact that plaintiff’s representative read and signed the contract does not obviate the applicability of the principles outlined in Corbin, §§ 582 and 583. Indeed, Professor Corbin illustrates the principles of the section by analyzing the case of Int'l Milling Co v Hachmeister, Inc, 380 Pa 407; 110 A2d 186 (1955), in which the parties entered into a contract for the sale and purchase of flour. During negotiations, buyer insisted that each shipment of flour meet certain established specifications and that such a provision be included in the contract. Seller refused to put the provision in the contract, but agreed to write a confirmation letter to buyer tying in the required specifications. Buyer placed a written order, indicating that the flour must meet the required specifications. Seller sent to buyer a printed contract form, which contained none of the specifications, but did contain an express integration clause. Seller also sent a separate letter assuring delivery in accordance with the required specifications. Buyer signed the written contract form. When a subsequent shipment of flour failed to meet the specifications, buyer rejected it and canceled all other orders. The Pennsylvania Supreme Court held that extrinsic evidence of the parties’ negotiations and antecedent agreements was admissible with regard to the issue whether buyer had *515assented to the printed contract form as a complete and accurate integration of the contract, notwithstanding its express provision to the contrary. Corbin, supra at 458.2 Professor Corbin notes that the court’s decision was fully supported by § 582, and explained at p 459:

It appears that in the instant case the buyer’s evidence was very strong, so strong that it would be a travesty on justice to keep it from the jury. This is not because the express provision of integration was concealed from the buyer; he was familiar with the printed contract form and knew that the provision was in it and the specifications were not. The court rightly refuses to deprive him of the opportunity to prove that its statement was untrue.... Bear in mind, however, that throughout the chapter the author has warned against the acceptance of flimsy and implausible assertions by parties to what has turned out to be a losing contract.

Section 582 of Corbin, allowing admission of extrinsic evidence with regard to the threshold question whether in fact the parties mutually assented to the written document as a completely integrated contract, does not contradict, but rather dovetails with, § 578, on which the lead opinion relies. Indeed, in § 578, p 402, Professor Corbin hinges a finding of conclusiveness of an express integration clause on whether the written document was “mutually assented to.” Further, in language excerpted out of the lead opinion’s quotation of § 578, Professor Corbin observes:

*516The fact that a written document contains one of these express provisions does not prove that the document itself was ever assented to or ever became operative as a contract. Neither does it exclude evidence that the document was not in fact assented to and therefore never became operative.

* * *

. . . [PJaper and ink possess no magic power to cause statements of fact to be true when they are actually untrue. Written admissions are evidential; but they are not conclusive. [Id. at 405, 407 (emphasis added).]

Thus, examination of the written document alone is insufficient to determine its completeness; extrinsic evidence that is neither flimsy nor implausible is admissible to establish whether the writing was in fact intended by the parties as a completely integrated contract. See Brady v Central Excavators, Inc, 316 Mich 594; 25 NW2d 630 (1947); In re Frost, 130 Mich App 556, 562, n 1; 344 NW2d 331 (1983) (parol evidence admissible where it was clear from the face of the writing that the writing did not contain the complete agreement as assented to by the parties); Franklin v White, 493 NE2d 161, 166 (Ind, 1986) (“An integration clause is only some evidence of the parties’ intentions. The trial court should consider an integration clause along with all other relevant evidence on the question of integration.”); Sutton v Stacey’s Fuel Mart, Inc, 431 A2d 1319, 1322, n 3 (Me, 1981) (citing Restatement Contracts, 2d for the proposition that a “merger clause does not control the question of whether a writing was intended to be a completely integrated agreement”); Restatement Contracts, 2d, § 209, comment b, p 115 (“Written contracts . . . may include an explicit declaration that *517there are no other agreements between the parties, but such a declaration may not be conclusive.”).

“The cardinal rule in the interpretation of contracts is to ascertain the intention of the parties. To this rule all others are subordinate.” McIntosh v Groomes, 227 Mich 215, 218; 198 NW 954 (1924). It is undisputed in this case that plaintiff’s decision to hold its convention at the resort was predicated on the understanding of the representatives for both defendants’ predecessor and plaintiff that the resort employed a unionized staff. Had plaintiff been made aware that the resort was for sale or that a sale was pending, I believe it is reasonable to assume that plaintiff’s representative would have insisted that such a clause be incorporated into the agreement. Courts should not require that contracting parties include provisions in their agreement contemplating every conceivable, but highly improbable, manner of breach. In my opinion, the circumstances surrounding execution of the contract, as well as the material change in circumstance that occurred when the resort was sold and the union staff fired, establishes as a matter of law that plaintiff did not assent to a completely integrated agreement. Corbin’s warning against the admission of “flimsy and implausible” evidence is not implicated here.

Accordingly, I would affirm the trial court’s order granting summary disposition in favor of plaintiff pursuant to MCR 2.116(C)(10).3

ORDER

EDWARD C. REED, Jr., Chief Judge.

This case comes to this Court by way of the United States Magistrate, who has tendered her Report and Recommendation regarding the defendant’s motion for summary judgment. At issue in the suit is the sale of a computer system by the defendant to the plaintiff. In 1977, the plaintiff approached the defendant with the idea of computerizing its billing and accounts receivable. The defendant, after observing the plaintiff’s daily operations, suggested that its B-80 model computer would handle the requirements of the plaintiff’s business. Soon after the B-80 was installed, however, the plaintiff began to experience a variety of problems with the machine, including basic equipment failures, and, more importantly, the machine’s inability to “multi-program.” The defendant made a series of efforts to correct the machine’s shortcomings, and assured the plaintiff through this period that the B-80 was the proper equipment for this type of business.

The problems with the B-80 continued until 1981, with the plaintiff protesting the machine’s problems, and the defendant apparently promising and attempting to fix them all the while. In 1981, the parties agreed that a newer model, the B-91, would be able to handle the desired multiprogramming without the difficulties experienced with the B-80. The B-91 was installed, and parts of the B-80 were transplanted into the new system. Ultimately, however, the same difficulties were experienced with the B-91. In December of 1982, after a similar series of basic equipment breakdowns, the parties retained an independent expert to analyze the B-91’s problems. This expert concluded that it was impossible for the B-91 to do the desired multi-programming, and that the B-91 could never be modified so as to perform these tasks. At this point, the plaintiff removed the defendant’s computer from its office, and installed a different system. Plaintiff filed this suit in November of 1984, some three years after the B-91 was installed, and some seven years after the B-80 was installed. In the complaint, the plaintiff raises a variety of causes of action, but these are more simply stated as actions for fraud and misrepresentation, and for breach of contract and warranty.

The defendant has moved this Court for summary judgment, contending that the plaintiff’s claims are all barred by the applicable statutes of limitation. In terms of the fraud claims, the defendant contends that the plaintiff must have been aware of the potential fraud or misrepresentation regarding the B-80 in 1980, when the decision was made to replace it with the B-91. Further, the defendant argues that the plaintiff must have been aware of the potential fraud or misrepresentation regarding the B-91 after installation in 1981, when it became apparent that the B-91 would also not perform as expected. In that the applicable statute of limitations in fraud cases in Nevada is three years, and in that neither of the fraud claims was filed within the three-year period, the defendant argues that summary judgment is proper on these claims. NRS § 11.190(3)(d).

The defendant further contends that the contract and warranty claims are similarly time-barred. Initially, the contracts in question in this case adopt a two-year statute as authorized by NRS § 104.2725(1). As with the fraud and misrepresentation claims, the defendant argues that the plaintiff was aware of the potential breaches of contract and warranty in 1980 for the B-80, and in 1981 for the B-91. Therefore, the applicable statute, as supplied by the *1150contract, indicates that these claims were stale by the time the plaintiff filed its action.

In her Report and Recommendation to this Court, the United States Magistrate found the following:

1. that the various statutes of limitations applicable in this case were not tolled during the defendant’s attempted repairs of the claimed deficiencies, nor were the claims surrounding the B-80 revived by the agreement in 1980 for the trade-in of the B-80 for the B-91.

2. that the contract causes of action surrounding the B-80 accrued no later than October, 1978, when the system had been delivered and began to malfunction.

3. that plaintiff’s knowledge of the B-80’s shortcomings causing it to trade in the system for the B-91 constituted knowledge of facts from which it should have been able to learn of any fraud or mistake regarding the B-80.

4. that the defendant had failed to supply the evidentiary support necessary to substantiate any of its claims regarding the B-91 system.

Because of these findings, the Magistrate recommends that the defendant’s motion for summary judgment be granted as far as all of plaintiff’s claims regarding the B-80. As far as the plaintiff’s claims regarding the B-91 are concerned, the Magistrate recommends that the defendant’s motion be denied, in that there still exist genuine issues of material fact on that claim. This Court has reviewed the Magistrate’s Report and Recommendation, as well as both parties’ objections. In that genuine issues of fact regarding both the B-80 and B-91 claims still exist, summary judgment is not proper at all in this case, and the Magistrate’s Report and Recommendation must be rejected in part and affirmed in part.

STANDARDS FOR SUMMARY JUDGMENT

Fed.R.Civ.P. 56(c) indicates that summary judgment is proper if the pleadings, depositions, answers to interrogatories, and admissions on file, together with any affidavits, show that there is no genuine issue of material fact left for resolution at trial. Id.; see Avila v. Traveler’s Insurance Companies, 651 F.2d 658, 660 (9th Cir.1980). The moving party has the burden of establishing that there is no genuine issue of fact left in the case and once this burden is met by producing sufficient evidence, the burden shifts to the opposing party to set forth specific facts which indicate the existence of a triable issue of fact. Id. The party opposing the motion is entitled to have evidence construed and inferences drawn from that evidence in the light most favorable to him, and if these inferences and evidence indicate the existence of a triable fact issue, summary judgment must be denied. Id. In the present case, it appears to this Court that there are genuine issues of material fact regarding statute of limitations questions of both the B-80 and the B-91 contracts, and that summary judgment is therefore not proper in this case.

THE FRAUD CLAIMS

As noted above, the Magistrate found that the plaintiff’s cause of action sounding in fraud regarding the B-80 system was time-barred, in that the plaintiff must have known or have had reason to know that there was potential fraud involved by 1980. The defendant agrees with this conclusion, but also contends that the fraud claims regarding the B-91 system are also time-barred, in that the plaintiff must have been aware of the potential fraud regarding the defendant’s representations of the newer machine immediately after it was installed. Neither of the assessments is entirely correct.

Initially, the Court notes that the Nevada statute of limitations regarding fraud claims is set forth in NRS § 11.190(4), which indicates that a cause of action sounding in fraud must be brought within three years from the discovery of the facts constituting the fraud or mistake. The Magistrate found that knowledge of facts regarding the potential fraud on the B-80 system existed in 1980, when both parties *1151agreed that the system would have to be replaced. Indeed, James Cathey, the plaintiff’s president, stated in deposition that he considered the B-80 to be a “dead issue” in 1980. This does not indicate that the plaintiff necessarily had knowledge of facts constituting fraud, however. That the B-80 was a dead issue in 1980 indicates that the plaintiff knew that the machine did not work, not necessarily that the plaintiff knew that it had been the victim of fraud. Further, as stated in the plaintiff’s affidavits, it seems possible that the actual date of the discovery of the fraud was in late 1982, when the report of the independent expert hired by both parties indicated that neither of the Burroughs systems would ever be capable of multi-programming, regardless of how many accessories were added.

The defendant further urges that the plaintiff had to know of the possible fraud regarding the B-91 immediately after the machine was installed in 1981. Once again, however, it appears that the plaintiff may have known only that the machine did not work as promised at that time. The actual date of the discovery of facts constituting fraud on the B-91 may also be the date of the report of the independent expert, as that report appears to have been the first indication to the plaintiff that the B-91 also would never be able to perform multi-programming.

This version of the facts is, of course, not necessarily what occurred between the parties. The Court merely discusses here the possible inferences from the evidence presented to it, so as to discover the existence of a genuine issue of material fact. See Avila, supra. At trial, it may indeed be proved that this interpretation of the evidence is faulty. On a motion for summary judgment, however, the Court merely looks for any genuine issue of material fact which must be resolved at trial. Id. In this case, the independent expert’s report raises such an issue regarding the date of the discovery of facts constituting fraud, and summary judgment must therefore be denied as to those counts.

THE CONTRACT AND WARRANTY CLAIMS

As stated above, the Magistrate found that the contract and warranty claims regarding the B-80 were time-barred, in that the contractual statute of limitations began to run in October of 1978, and that the actions of the defendant did not toll the running of the statute. The defendant further argues that the statute regarding the B-91 began to run as soon as the machine was delivered in 1981, and that this claim is likewise time barred.

The applicable statute of limitations on goods is set out in Nevada’s version of UCC § 2-725, which states that *1152NRS § 104.2725. In the present case, the contracts of the parties do indicate that the applicable statute has been trimmed down to two years, as provided for in section 1 of the statute. It would thus appear that the applicable statute is 2 years in this case.

*11511. An action for breach of any contract for sale must be commenced within 4 years after the cause of action has accrued. By the original agreement the parties may reduce the period of limitation to not less than 1 year but may not extend it.

2. A cause of action accrues when the breach occurs, regardless of the aggrieved party’s lack of knowledge of the breach. A breach of warranty occurs when tender of delivery is made, except that where a warranty explicitly extends to future performance of the goods and discovery of the breach must await the time of such performance the cause of action accrues when the breach is or should have been discovered.

3. Where an action commenced within the time limited by subsection 1 is so terminated as to leave available a remedy by another action for the same breach such other action may be commenced after the expiration of the time limited and within 6 months after the termination of the first action unless the termination resulted from voluntary discontinuance or from dismissal for failure or neglect to prosecute.

4. This section does not alter the law on tolling of the statute of limitations nor does it apply to causes of action which have accrued before this chapter becomes effective.

*1152The plaintiff contends, however, that the two years provision is unconscionable, as it is the result of a gross disparity of bargaining power between the plaintiff and the defendant. See NRS § 104.2302. For the purposes of this motion, however, the unconscionability argument need not be considered, in that one plausible interpretation of the facts indicates that the contract causes of action did not accrue until December of 1982. In that suit was filed in November of 1984, it does not matter that the statute may actually be only two years long in this case.

In her Report and Recommendation, the Magistrate concluded that the choice of law clause in the contract governed the statute of limitations question, and that Michigan law therefore controlled the question of when and if the statute was tolled. This assessment appears to be incorrect. The classical rule, as established in Restatement (Second) of Conflict of Laws section 142 (Supp.1985), indicates that the local law of the forum governs whether an action is barred by the statute of limitations. Id., comment (a); see Santana v. Holiday Inns, Inc., 686 F.2d 736, 738 (9th Cir.1982). In that this Court is bound to apply Nevada law in conflict situations arising in diversity cases, it is Nevada law, not that of Michigan, which must control the statute of limitations and tolling questions in this case. See Klaxton Co. v. Stentor Electric Manufacturing Co., 313 U.S. 487, 496-97, 61 S.Ct. 1020, 1021-22, 85 L.Ed. 1477 (1941); Santana, supra, at 738-39. It appears that under the general rule, the statute of limitations in contract and warranty actions may be tolled during the period in which the seller of goods promises to repair and makes attempts to repair faulty goods.

In Aced v. Hobbs Sesack Plumbing Co., 55 Cal.2d 573, 360 P.2d 897, 12 Cal.Rptr. 257 (1961), for example, Hobbs had contracted in 1953 with Aced as a subcontractor to furnish the labor and material for a radiant heating system in a home being built by Aced. 360 P.2d at 898, 12 Cal. Rptr. at 258. Numerous leaks developed in the system after it was installed, and the entire system had to be replaced in 1955. In September of 1956, the owners of home brought suit against Aced, and Aced impleaded Hobbs in February of 1957 for indemnity. Id. Hobbs defended against the impleader, contending that any possible warranty on the pipes in question would have expired at the end of the four-year statute of limitations, which had expired the month before Aced had impleaded Hobbs.

The Supreme Court of California rejected this argument. “The statute of limitation,” it noted, “is tolled where one who has breached a warranty claims that the defect can be repaired and attempts to make repairs.” Id., 360 P.2d at 904, 12 Cal.Rptr. at 264 citing Southern Cal. Enterprises v. D.N. & E. Walter & Co., 78 Cal.App.2d 750-755, 178 P.2d 785 (1947); Louisville Silo & Tank Co. v. Thweatt, 295 S.W. 710, 712 (1927); Heath v. Moncrieff Furnace Co., 200 N.C. 377, 156 S.E. 920, 922 (1931). Although the court noted that the facts were not clear enough to allow application of the rule in this case, it found that there was testimony from a Hobbs’ representative which indicated that Hobbs had made promises to the owners of the house that it would repair the problem, and had actually spent several months in attempting to repair the problem. Thus, the court concluded that a clearer record might have indicated that the rule should be applied, and that the statute would have been tolled by the promises and repair attempts.

Other courts have accepted the proposition that repair promises and attempts can toll the running of the statute of limitations, see Daughtry v. Jet Aeration Co., 18 Wash.App. 155, 566 P.2d 1267, rev’d on other grounds, 91 Wash.2d 704, 592 P.2d 631 (1979); Styron v. Loman-Garrett Supply Co., 6 N.C.App. 675, 171 *1153S.E.2d 41 (1970); Mid City Finance Co. v. Coleman, 232 So.2d 918 (La.App.1970); Mack v. Hugh W. Comstock Associates, Inc., 225 Cal.App.2d 583, 37 Cal.Rptr. 466 (1964); Nowell v. Great Atlantic & Pacific Tea Co., 250 N.C. 575, 108 S.E.2d 889 (1959). Although no Nevada case directly discusses the point, this tolling concept is thus widely accepted in other jurisdictions and is found in several well reasoned cases. Where the state courts are silent on a matter, it is this Court’s task to use its “own best judgment in predicting how the state’s highest court would decide the case.” Fiorito Bros., Inc. v. Fruehauf Corp., 747 F.2d 1309, 1314 (9th Cir.1984) quoting Takahashi v. Loomis Armored Car Service, 625 F.2d 314, 316 (9th Cir.1980). In that the more persuasive opinions from other jurisdictions adopt this method of tolling, the Court finds that the Nevada Supreme Court would also assume this position if it were presented with this question.

Application of this tolling method to this case indicates that summary judgment is inappropriate on the contract and warranty claims as well. Initially, the plaintiff’s evidence shows that the defendant had made promises to repair and had actually attempted to repair the B-80 unit from the date on which it was purchased until shortly before the B-91 was brought in to replace it. Further, the plaintiff’s evidence indicates that the B-91 itself was a replacement for the B-80; that is, the B-91’s installation was itself a further attempt to repair the B-80. This is borne out by the fact that parts of the B-80 were used in the B-91. In this sense, the plaintiff contends that the installation of the two computers, and the promises and attempts to repair them should be viewed as one single transaction, and that the cause of action for the transaction did not arise until the report of the independent expert indicated that the defendant’s machine could never fulfill the plaintiff’s requirements. Up until this time, the plaintiff contends, the defendant had been steadfastly trying to remedy the problems with the systems, and had promised to make the system work. It was only after the report was filed that the true breach occurred.

The plaintiff’s evidence thus indicates the existence of a genuine issue of material fact. If the plaintiff’s versions of the facts ultimately bears up at trial, the defendant’s repair attempts and promises will have tolled the statute of limitations on the warranty and contract claims, and the case will be decided on the merits. Because of this genuine fact issue, summary judgment is also not available on the plaintiff’s contract and warranty claims.

IT IS, THEREFORE, HEREBY ORDERED that the Magistrate’s Report and Recommendation is AFFIRMED IN PART, and REJECTED IN PART.

IT IS FURTHER ORDERED that the defendant’s motion for summary judgment is DENIED.

Opinion by

Hirt, J.,

Plaintiff is an ordained rabbi of the orthodox Hebrew faith. He however does not officiate except on *361occasion as a professional rabbi-cantor in the liturgical service of a synagogue. The defendant is an incorporated Hebrew congregation with a synagogue in Philadelphia. Plaintiff, in response to defendant’s advertisement in a Yiddish newspaper, appeared in Philadelphia for an audition before a committee representing the congregation. As a result, a written contract was entered into on June 26, 1950, under the terms of which plaintiff agreed to officiate as cantor at the synagogue of the defendant congregation “for the High Holiday Season of 1950”, at six specified services during the month of September 1950. As full compensation for the above services the defendant agreed to pay plaintiff the sum of $1,200.

The purpose upon which the defendant congregation was incorporated is thus stated in its charter: “The worship of Almighty God according to the faith, discipline, forms and rites of the orthodox Jewish religion.” And up to the time of the execution of the contract the defendant congregation conducted its religious services in accordance with the practices of the orthodox Hebrew faith. On behalf of the plaintiff there is evidence that under the law of the Torah and other binding authority of the Jewish law, men and women may not sit together at services in the synagogue. In the orthodox synagogue, where the practice is observed, the women sit apart from the men in a gallery, or they are separated from the men by means of a partition between the two groups. The contract in this case is entirely silent as to the character of the defendant as an orthodox Hebrew congregation and the practices observed by it as to the seating at the services in the synagogue. At a general meeting of the congregation on July 12, 1950, on the eve of moving into a new synagogue, the practice of separate seating by the defendant formerly observed was modified and *362for the future the first four rows of seats during religious services were set aside exclusively for the men, and the next four rows for the women, and the remainder for mixed seating of both men and women. When plaintiff was informed of the action of the defendant congregation in deviating from the traditional practice as to separate seating, he through his attorney notified the defendant that he, a rabbi of the orthodox faith, would be unable to officiate as cantor because “this would be a violation of his beliefs.” Plaintiff persisted in the stand taken that he would not under any circumstances serve as cantor for defendant as long as men and women were not seated separately. And when defendant failed to rescind its action permitting men and women to sit together during services, plaintiff refused to officiate. It then was too late for him to secure other employment as cantor during the 1950 Holiday season except for one service which paid him $100, and he brought suit for the balance of the contract price.

The action was tried before the late Judge Fenerty, without a jury, who died before deciding the issue. By agreement the case was disposed of by the late President Judge Frank Smith “on the notes of testimony taken before Judge Fenerty.” At the conclusion of the trial, counsel had stipulated that the judge need not make specific findings of fact in his decision. This waiver applied to the disposition of the case by Judge Smith. Nevertheless Judge Smith did specifically find that defendant, at the time the contract was entered into, “Was conducting its services according to the Orthodox Hebrew Faith.” Judge Smith accepted the testimony of three rabbis learned in Hebrew law, who appeared for plaintiff, to the effect: “That Orthodox Judaism required a definite and physical separation of the sexes in the synagogue.” And he also con*363sidered it established by the testimony that an orthodox rabbi-cantor “could not conscientiously officiate in a ‘trefah’ synagogue, that is, one that violates Jewish law”; and it was specifically found that the old building which the congregation left, “had separation in accordance with Jewish orthodoxy.” The ultimate finding was for the plaintiff in the sum of $1,100 plus interest. And the court entered judgment for the plaintiff on the finding. In this appeal it is contended that the defendant is entitled to judgment as a matter of law.

The finding for the plaintiff in this trial without a jury has the force and effect of a verdict of a jury and in support of the judgment entered by the lower court, the plaintiff is entitled to the benefit of the most favorable inferences from the evidence. Jann v. Linton’s Lunch, 150 Pa. Superior Ct. 653, 29 A. 2d 219. Findings of fact by a trial judge, sitting without a jury, which are supported by competent substantial evidence are conclusive on appeal. Scott-Smith Cadillac Co., Inc. v. Rajeski, 168 Pa. Superior Ct. 116, 70 A. 2d 454.

Although the contract is silent as to the nature of the defendant congregation, there is no ambiguity in the writing on that score and certainly nothing was omitted from its terms by fraud, accident or mistake. The terms of the contract therefore could not be varied under the parol evidence rule. Bardwell v. The Willis Company, 375 Pa. 503, 100 A. 2d 102; Mathers v. Roxy Auto Company, 375 Pa. 640, 101 A. 2d 680. Another principle controls the interpretation of this contract.

There is sufficient competent evidence in support of the finding that this defendant was an orthodox congregation, which observed the rule of the ancient Hebrew law as to separate seating during the services of the High Holiday Season; and also to the effect that *364the rule had been observed immemorially and invariably by the defendant in these services, without exception. As bearing on plaintiff’s bona fide belief that such was the fact, at the time he contracted with the defendant, plaintiff was permitted to introduce in evidence the declarations of Rabbi Ebert, the rabbi of the defendant congregation, made to him prior to signing of the contract, in which the rabbi said: “There always was a separation between men and women” and “there is going to be strict separation between men and women”, referring to the seating in the new synagogue. Rabbi Lipsehitz who was present, testified that Rabbi Ebert, in response to plaintiff’s question “Will services be conducted as in the old Congregation” replied “Sure. There is no question about that” referring to the prior practice of separate seating. The relationship of rabbi to the congregation which he serves does not create the legal relationship of principal and agent. Cf. Reifsnyder et al. v. Dougherty Tr., 301 Pa. 328, 152 A. 98. And Rabbi Ebert in the absence of special authority to speak for the congregation could not legally bind the defendant by his declarations to the plaintiff prior to the execution of the contract. Davidsville F. Nat. Bk. v. St. John’s C., 296 Pa. 467, 472, 146 A. 102. But while the declarations of Rabbi Ebert, above referred to would have been inadmissible hearsay as proof of the truth of what was said, yet his declarations were properly admissible as bearing upon plaintiff’s state of mind and his intent in entering into the contract. 1 Henry Pa. Evid., 4th Ed., §§22, 469. “Statements tending to show intent are admissible in evidence although self-serving. Ickes v. Ickes, 237 Pa. 582, 591, 85 A. 885”: Smith v. Smith, 364 Pa. 1, 9, 70 A. 2d 630.

In determining the right of recovery in this case the question is to be determined under the rules of our civil law and the ancient provision of the Hebrew *365law relating to separate seating is read into the contract only because implicit in the writing as to the basis — according to the evidence — upon which the parties dealt. Cf. Canovaro et al. v. Bros. of H. of St. Aug., 326 Pa. 76, 86, 191 A. 140. In our law the provision became a part of the written contract under a principle analogous to the rule applicable to the construction of contracts in the light of custom or immemorial and invariable usage. It has been said that: “When a custom or usage is once established, in absence of express provision to the contrary it is considered a part of a contract and binding on the parties though not mentioned therein, the presumption being that they knew of and contracted with reference to it”: 1 Henry Pa. Evid., .4th Ed., §203. Cf. Restatement, Contracts, §248(2) and §249. In this case there was more than a presumption. From the findings of the trial judge supported by the evidence it is clear that the parties contracted on the common understanding that the defendant was an orthodox synagogue which observed the mandate of the Jewish law as to separate seating. That intention was implicit in this contract though not referred to in the writing, and therefore must be read into it. It was on this ground that the court entered judgment for plaintiff in this case.

Judgment affirmed.

The opinion of the court was delivered by

Parker, C. J.:

Plaintiff is a banking corporation with its place of business at Lawrence, Kansas, and the duly appointed administrator, with the will annexed, of the will of Bertha C. Ellsworth, deceased. Defendant is the Methodist Home For the Aged, a corporation, with its principal place of business at Topeka, Kansas, where it operates a home for the aged.

The events leading up to the institution of this litigation are *101not in controversy and should be stated at the outset in order to insure a proper understanding of the appellate issues involved.

On September 13, 1953, Rertha C. Ellsworth, who desired to be admitted to the defendant’s home and was then single and more than seventy-one years of age, made a written application for admission to such home. Thereafter, having been advised her application had been approved, she was admitted to the home on May 10, 1954, and on the same date entered into the written agreement with defendant which is actually the subject of this litigation. Pertinent portions of such agreement, which we pause to note had been prepared by defendant on one of its standard forms, used for admission of members, read:

“This Agreement, made and entered into this 10th day of May, 1954, by and between The Methodist Home for the Aged, a Corporation, of Topeka, Kansas, Party of the First Part and Bertha C. Ellsworth, of Lawrence, Kansas, Party of the Second Part, Witnesseth:

“Party of the Second Part having this day given Party of the First Part, without reservation, the sum of $10,779.60 to be used and disposed of in the furtherance of its benevolence and charitable work as it may deem best, Party of the First Part admits Party of the Second Part into its Home as a member thereof during the period of her natural life, and agrees to furnish

“Fifth: It is clearly understood that Party of the Second Part has been received in accordance with the new regulations on a probation period of two months in which time she has the opportunity of finding out whether she desires to remain in the Home; and also find out whether the Home is able to satisfy the requirements. If it should be found advisable to discontinue her stay in the Home, then her gift, with the exception of $80.00 per month shall be refunded.

“The rules and regulations and by-laws of the Home as they now are and as they from time to time may be adopted and promulgated by the Board of Directors of said Party of the First Part are hereby referred to and made a part hereof and the Party of the Second Part hereby agrees to be bound by same. It is especially understood and agreed that in case of serious mental illness requiring hospital care and attention, that the First Party shall have the right to make proper arrangements for the treatment and care of the Second Party in a lawful manner in a proper State Institution, provided that if Second Party is discharged as completely cured to admit Second Party into the Home without further financial requirements.” (Emphasis supplied.)

The parties concede that defendant’s by-law, article 12, was in full force and effect on the date of the execution of the agreement and therefore, according to the terms of that agreement, is a part of the contract. It reads:

“Probationary membership means a short trial period while the member becomes adjusted to the life of the Home. The probationary member-ship *102shall not continue for a longer period than two consecutive months. If for any reason the trial member does not desire to remain in the Home he or she shall have the privilege of leaving. On the other hand, if the Home for any reason does not desire to continue the membership then the member shall be notified in writing and leave the Home within a week after such notice is given. Only members who do not have the money or securities to pay for their life Membership shall be granted tire privilege of paying by the month.” (Emphasis supplied.)

After execution of the May 10, 1954, agreement Rertha C. Ells-worth remained in the home until she died on June 10, 1954. At that time neither she nor the home had made an election as to whether she was to leave the home or remain therein after the expiration of the probationary period specified by its terms. However, it is conceded that during the interim, and on June 4, 1954, the plaintiff bank in' its capacity as trustee had paid the defendant the sum of $10,799.60 by a check, which defendant had cashed, specifying that such check was “In Payment of Life Membership for Rertha C. Ellsworth in the Methodist Home for the Aged, as specified in Agreement dated May 10, 1954”, and that defendant had acknowledged payment of that sum by a receipt of like import.

Upon the death of Rertha Ellsworth plaintiff was appointed by the probate court of Douglas County, Kansas, as Administrator CTA of such decedent. Thereafter it made written demand on the defendant for performance under the agreement, including pertinent by-laws, and demanded that defendant refund the estate of its decedent the amount paid pursuant thereto, less any amounts due the Home under its terms, particularly the fifth clause thereof. When this demand was refused plaintiff procured authority from the probate court to institute the instant action to recover such amount as an asset of the estate of Rertha C. Ellsworth, deceased.

Following action as above indicated plaintiff commenced this lawsuit by filing a petition which, it may be stated, recites in a general way that under the more important facts, conditions and circumstances, heretofore outlined, the defendant had never attained a life membership in the home by reason of her death prior to the expiration of the probationary membership period prescribed by the contract, hence the contract should be construed as contemplating her estate was entitled to a return of the money paid by her to defendant for such a membership. When a demurrer to this pleading, based on the ground it failed to state a cause of action, was overruled by the trial court defendant filed an answer alleging *103in substance that under the same facts, conditions and circumstances: the contract between it and the decedent is to be construed as warranting its retention of the sum paid by such decedent for the life-membership even though, prior to her death, such decedent neither indicated that she did not desire to remain in the home nor that she desired the privilege of leaving it. It should perhaps be added that such answer contains an allegation that on May 10, 1954, decedent was permitted to enter the home without having paid her life membership; admits subsequent payment of such membership in the manner heretofore indicated; and makes decedent’s application for admission to the home a part of such pleading.

With issues joined, as heretofore related, the cause came on for trial by the court. During the trial facts, as heretofore related, were established by evidence and at the conclusion thereof the trial court, after holding that the salient question in the case was purely a question of law involving the interpretation of the contract, rendered judgment decreeing that plaintiff was entitled to recover the amount paid by Bertha C. Ellsworth to the Home, less $235 paid by the Home for her funeral expenses and less the sum of $80 provided for in the contract in the event she had elected not to remain in the home. Thereupon defendant perfected this appeal wherein under proper specification of errors it charges the trial court erred in overruling the demurrer to the petition; in rendering judgment for plaintiff and against defendant, wholly contrary to the law and the terms of the agreement; and in overruling its motion for a new trial.

In a preliminary way it can be said a careful examination of the record leads to the inescapable conclusion the trial court was eminently correct in holding that the all decisive question involved in this case is purely a question of law involving the interpretation of the contract entered into between the appellant and Bertha C. Ellsworth, deceased. Indeed the parties make no serious contention to the contrary. For that reason, and others to be presently disclosed, we turn directly to appellant’s claim the trial court’s judgment was contrary to the terms of the agreement and to the law, mindful as we do so that where — as here — the terms of a contract are ambiguous, obscure or susceptible of more than one meaning there are certain well defined rules to which courts must adhere in construing its provisions. Four of such rules, which we believe have special application here, can be stated as follows:

*104■ 1. That doubtful language in a contract is construed most strongly against the party preparing the instrument or employing the words ■concerning which doubt arises. (See Kinmonth v. Holm,, 180 Kan. 389, 392, 304 P. 2d 494; Francis v. Shawnee Mission Rural High School, 161 Kan. 634, 170 P. 2d 807; Green v. Royal Neighbors of ■America, 146 Kan. 571, 73 P. 2d 1; 12 Am. Jur., Contracts, 795 § .252; 17 C. J. S., Contracts, 751 § 324; Hatcher’s Kansas Digest [Rev. ■Ed.], Contracts, § 44; West’s Kansas Digest, Contracts, § 155.)

2. That where a contract is susceptible of more than one construction its terms and provisions must, if possible, be construed in such manner as to give effect to the intention of the parties at the time of its execution. (Braly v. Commercial Casualty Ins. Co., 170 Kan. 531, 227 P. 2d 571.)

3. That in determining intention of the parties where ambiguity exists in a contract the test is not what the party preparing the instrument intended its doubtful or ambiguous words to mean but what a reasonable person, in the position of the other party to the agreement, would have understood them to mean under the existing conditions and circumstances. (Braly v. Commercial Casualty Ins. Co., supra.)

4. That the intent and purpose of a contract is not to be determined by considering one isolated sentence or provision thereof but by considering and construing the instrument in its entirety. (Maltby v. Sumner, 169 Kan. 417, 219 P. 2d 395; In re Estate of Koellen, 162 Kan. 395, 176 P. 2d 544; Lawrence v. Cooper Independent Theatres, 177 Kan. 125, 276 P. 2d 350.)

Stated, substantially in its own language, the principal contention advanced by appellant as grounds for reversal of the judgment is that the membership agreement between it and the involved decedent was fully executed inasmuch as decedent had been admitted to the Home as a life member on May 10, 1954, and thereafter caused her life membership to be paid; hence, since nothing further needed to be done by the parties to make the portion of the agreement relating to life membership binding, provisions of the contract with respect thereto had become fully executed and title to the fee paid for such membership had vested in appellant.

If we could limit our construction of the contract to its first two paragraphs, as heretofore quoted, we might well conclude that appellant’s views respecting the status of the agreement and the gift therein mentioned could be upheld. However, as has been *105previously demonstrated, our obligation is not to consider isolated provisions of the contract but to consider and construe such instrument in its entirety. When succeeding paragraphs of the agreement, and the incorporated by-laws, particularly portions thereof which we have heretofore underlined for purposes of emphasis, are reviewed in the light of the rule to which we have just referred, as well as others heretofore mentioned, we have little difficulty in concurring in the views expressed by the trial court in rendering its judgment that the contract had never become executed and that title to the gift paid by the decedent for a life membership had not vested in the Home. In fact, and without repeating the emphasized portions of the agreement on which we base our conclusion, we go further and hold that, under the clear import and meaning of such emphasized provisions, Bertha C. Ellsworth, because of her untimely death during the probationary and/or trial period expressly required by their terms, never attained a life membership status in the Home. Indeed to hold otherwise would not only do violence to the language of the contract but read into it something that is not there.

One question remains in this lawsuit. Who, the Home or the decedent’s estate, is entitled to the life membership fee paid by decedent to appellant? In this connection it is interesting to note that the money was paid by decedent by a check and receipted for by appellant in writing, each of which instruments contain a recital “In Payment of Life Membership for Bertha C. Ellsworth in the Methodist Home for the Aged, as specified in Agreement dated May 10, 1954.” So, since it cannot be denied the contract contains no express provisions relating to where the money was to go if Bertha Ellsworth died during the probationary and/or trial period prescribed by its terms, it appears we are faced with the obligation of determining what was intended by the parties at the time of the execution of the agreement in the event of such a contingency.

Strange as it may seem, the question thus presented has been before the Courts on but few occasions. However, it has been decided under similar circumstances. An interesting discussion on the subject appears in 10 A. L. R. 2d., Anno., pp. 874, 875 § 12. It reads:

“Many entrance contracts provide for a probationary period during which the applicant for admission to the charitable home as well as the home itself can dissolve the agreement without cause. In case the applicant is refused permanent admission at the end of the trial period or withdraws during the *106period of his own volition, all payments made, less a fixed weekly charge for the time he stayed at the home, are refunded to him and his property rights are restored.

“An interesting situation arises if the applicant dies during the probationary period without having been either accepted or rejected as a permanent inmate. The legal question then is whether or not the charitable home may retain the applicant’s property on the ground that the agreement had not been dissolved by either party.

“In a majority of cases this question has been answered iii the negative and it has been held that the home may not claim or retain the applicant’s property, on the ground that the death of the applicant has made it impossible to determine whether he would have become a. permanent inmate at the end of the probationary period.”

In connection with the foregoing quotation the author cites The Evangelical Lutheran St. S. Cong. v. Bishop, 213 Ill. App. 137; Christenson v. Board of Charities, 253 Ill. App. 380; Kirkpatrick Home For Childless Women v. Kenyon, 119 Misc. 349; 196 N. Y. S. 250, 196 N. Y. S. 475, 199 N. Y. S. 851, as supporting the conclusion reached by him in the concluding paragraph of his discussion and one case only, Dodge v. Home, 95 N. H. 472, 67 A. 2d. 10, as holding to the contrary. We may add our somewhat extended research of the books, including our own reports, discloses no other cases which can be regarded as decisive of the question presented under similar facts, conditions and circumstances.

Again reviewing the contract in the light of the heretofore stated rules, and mindful that appellant, not the decedent, prepared the involved contract, we are impelled to the view that a reasonable person, in the position of the decedent at the time of the execution of the contract, would have understood the provisions of that instrument to mean that unless and until she attained the status of a life member in the appellant’s home she, or her estate, would be entitled to a return of the money paid by her for that right, less amounts specified in the agreement. Moreover we are convinced, that having prepared the contract, appellant’s failure to make express provision therein for retaining the money paid by Bertha C. Ellsworth as a life membership fee, in the event of her death during the period of her probationary and/or trial membership status, precludes any construction of that agreement which would warrant its retention of such money upon the happening of that contingency.

After careful consideration of the decisions last above cited we have concluded those having the effect of holding, under similar *107circumstances, that the appellant cannot claim or retain Rertha Ellsworth’s lifetime payment for the reason her death made it impossible for her to determine whether she was to become a permanent inmate of the Home at the end of the probation period, are more sound in principle and better reasoned than the one case holding to the contrary. Therefore, based on the conclusions heretofore announced and on what is said and held in such decisions, we hold that the trial court did not err in rendering the judgment from which the Home has appealed.

Lest we be charged with overlooking it, we pause here to note, we regard Old Peoples Home v. Miltner, 149 Kan. 847, 89 P. 2d 874, relied on by each of the parties in support of respective claims regarding the propriety of the judgment, as clearly distinguishable and hence of no value as a precedent controlling issues involved in the case at bar.

Contentions advanced by appellant in connection with the overruling of its demurrer to appellee’s evidence and the overruling of its motion for a new trial are the same as those heretofore considered, discussed and determined. For that reason further discussion of the propriety of such rulings is neither necessary nor required.

The judgment is affirmed.

*139HINCKS, Circuit Judge.

Appeal from the United States District Court, Southern District of New York, Walsh, Judge, upon the dismissal of the complaint after plaintiff’s case was in.

The defendant-appellee, a processor of rice, in July 1952 entered into an agreement with the plaintiff-appellant, an exporter, for the sale of 95,600 pockets of rice. The terms of the agreement, evidenced by a purchase memorandum, indicated that the price per pocket was to be “$8.25 F.A.S. Lake Charles and/or Houston, Texas”; that shipment was to be “December, 1952, with two weeks call from buyer”; and that payment was to be by “irrevocable letter of credit to be opened immediately payable against” dock receipts and other specified documents. In the fall, the appellant, which had already committed itself to supplying this rice to a Japanese buyer, was unexpectedly confronted with United States export restrictions upon its December shipments and was attempting to get an export license from the government. December is a peak month in the rice and cotton seasons in Louisiana and Texas, and the appellee became concerned about shipping instructions under the contract, since congested conditions prevailed at both the mills and the docks. The appellee seasonably elected to deliver 50,000 pockets at Lake Charles and on December 10 it received from the appellant instructions for the Lake Charles shipments. Thereupon it promptly began shipments to Lake Charles which continued until December 23, the last car at Lake Charles being unloaded on December 31. December 17 was the last date in December which would allow appellee the two week period provided in the contract for delivery of the rice to the ports and ships designated. Prior thereto, the appellant had been having difficulty obtaining either a ship or a dock in this busy season in Houston. On December 17, the appellee had still received no shipping instructions for the 45,600 pockets destined for Houston. On the morning of the 18th, the appellee rescinded the contract for the Houston shipments, although continuing to make the Lake Charles deliveries. It is clear that one of the reasons for the prompt cancellation of the contract was the rise in market price of rice from $8.25 per pocket, the contract price, to $9.75. The appellant brought this suit for refusal to deliver the Houston quota.

The trial court, in a reasoned but unreported opinion which dealt with all phases of the case, held that New York would apply Texas law. Auten v. Auten, 308 N.Y. 155, 124 N.E.2d 99, 50 A.L.R. 2d 246. We think this ruling right, but will not discuss the point because it is conceded that no different result would follow from the choice of Louisiana law.

The area of contest is also considerably reduced by the appellant’s candid concession that the appellee’s duty to ship, by virtue of the two-week notice provision, did not arise until two weeks after complete shipping instructions had been given by the appellant. Thus on brief the appellant says: “[w]e concede (as we have done from the beginning) that on a fair interpretation of the contract appellant had a duty to instruct appellee by December 17, 1952 as to the place to which it desired appellee to ship —at both ports, and that, being late with its instructions in this respect, appellant could not have demanded delivery (at either port) until sometime after December 31, 1952.” This position was taken, of course, with a view to the contract provision for shipment “December, 1952”: a two-week period ending December 31 would begin to run on December 17. But although appellant concedes that the two weeks’ notice to which ap-pellee was entitled could not be shortened by the failure to give shipping instructions on or before December 17, it stoutly insists that upon receipt of shipping instructions subsequent to December 17 the appellee thereupon became obligated to deliver within two weeks thereafter. We do not agree.

It is plain that a giving of the notice by the appellant was a condition precedent to the appellee’s duty to ship.. *140Corbin on Contracts, Vol. 3, § 640. Id. § 724. Obviously, the appellee could not deliver free alongside ship, as the contract required, until the appellant identified its ship and its location. Jacksboro Stone Co. v. Fairbanks Co., 48 Tex.Civ. App. 639,107 S.W. 567; Fortson Grocery Co. v. Pritchard Rice Milling Co., Tex. Civ.App., 220 S.W. 1116. Thus the giving of shipping instructions was what Professor Corbin would classify as a “promissory condition”: the appellant promised to give the notice and the ap-pellee’s duty to ship was conditioned on the receipt of the notice. Op. eit. § 633, p. 523, § 634, footnote 38. The crucial question is whether that condition was performed. And that depends on whether the appellee’s duty of shipment was conditioned on notice on or before December 17, so that the appellee would have two weeks wholly within December within which to perform, or whether, as we understand the appellant to contend, the appellant could perform the condition by giving the notice later in December, in which case the appellee would be under a duty to ship within two weeks thereafter. The answer depends upon the proper interpretation of the contract: if the contract properly interpreted made shipment in December of the essence then the failure to give the notice on or before December 17 was nonperformance by the appellant of a condition upon which the appellee’s duty to ship in December depended.

In the setting of this ease, we hold that the provision for December delivery went to the essence of the contract. In support of the plainly stated provision of the contract there was evidence that the appellee’s mills and the facilities appurtenant thereto were working at full capacity in December when the rice market was at peak activity and that appellee had numerous other contracts in January as well as in December to fill. It is reasonable to infer that in July, when the contract was made, each party wanted the protection of the specified delivery period; the appellee so that it could schedule its production without undue congestion of its storage facilities and the appellant so that it could surely meet commitments which it in turn should make to its customers. There was also evidence that prices on the rice market were fluctuating. In view of this factor it is not reasonable to infer that when the contract was made in July for December delivery, the parties intended that the appellant should have an option exercisable subsequent to December 17 to postpone delivery until January. United Irr. Co. v. Carson Petroleum Co., Tex.Civ.App., 283 S.W. 692; Steiner v. United States, D.C., 36 F.Supp. 496. That in effect would have given the appellant an option to postpone its breach of the contract, if one should then be in prospect, to a time when, so far as could have been foreseen when the contract was made, the price of rice might be falling. A postponement in such circumstances would inure to the disadvantage of the appellee who was given no reciprocal option. Further indication that December delivery was of the essence is found in the letter of credit which was provided for in the contract and established by the appellant. Under this letter, the bank was authorized to pay ap-pellee only for deliveries “during December, 1952.” It thus appears that the appellant’s interpretation of the contract, under which the appellee would be obligated, upon receipt of shipping instructions subsequent to December 17, to deliver in January, would deprive the appellee of the security for payment of the purchase price for which it had contracted.

Since, as we hold, December delivery was of the essence, notice of Shipping instructions on or before December 17 was not merely a “duty” of the appellant — as it concedes: it was a condition precedent to the performance which might be required of the appellee. The nonoccurrence of that condition entitled the appellee to rescind or to treat its contractual obligations as discharged. Cor-bin on Contracts, §§ 640, 724 and 1252; Willistou on Sales, §§ 452, 457; Restatement, Contracts, § 262; National Com*141modity Corp. v. American Fruit Growers, 6 Terry 169, 45 Del. 169, 70 A.2d 28; Alpena Portland Cement Co. v. Backus, 8 Cir., 156 F. 944; Jungmann & Co. v. Atterbury Bros., Inc., 249 N.Y. 119, 163 N.E. 123; Arnolt Corp. v. Stansen Corp., 7 Cir., 189 F.2d 5. On December 18th the appellant unequivocally exercised its right to rescind. Having done so, its obligations as to the Houston deliveries under the contract were at an end. And of course its obligations would not revive thereafter when the appellant finally succeeded in obtaining an export permit, a ship and a dock and then gave shipping instructions; when it expressed willingness to accept deliveries in January; or when it accomplished a “liberalization” of the outstanding letter of credit whereby payments might be made against simple forwarder’s receipts instead of dock receipts.1

The appellant urges that by reason of substantial part performance on its part prior to December 17th, it may not be held to have been in default for its failure sooner to give shipping instructions. The contention has no basis on the facts. As to the Houston shipments the appellant’s activities prior to December 17th were not in performance of its contract: they were merely preparatory to its expectation to perform at a later time. The mere establishment of the letter of credit was not an act of performance: it was merely an arrangement made by the appellant for future performance which as to the Houston deliveries because of appellant’s failure to give shipping instructions were never made. From these preparatory activities the appellee had no benefit whatever.

The appellant also maintains that the contract was single and “indivisible” and that consequently appellee’s continuing shipments to Lake Charles after December 17 constituted an election to reaffirm its total obligation under the contract. This position also, we hold untenable. Under the contract, the appellee concededly had an option to split the deliveries betwixt Lake Charles and Houston. The price had been fixed on a per pocket basis, and payment, under the letter of credit, was to be made upon the presentation of dock receipts which normally would be issued both at Lake Charles or Houston at different times. The fact that there was a world market for rice and that in December the market price substantially exceeded the contract price suggests that it would be more to the appellant’s advantage to obtain the Lake Charles delivery than to obtain no delivery at all. The same considerations suggest that by continuing with the Lake Charles delivery the appellee did not deliberately intend to waive its right to cancel the Houston deliveries. Conclusions to the contrary would be so greatly against self-interest as to be completely unrealistic. The only reasonable inference from the totality of the facts is that the duties of the parties as to the Lake Charles shipment were not at all dependent on the Houston shipments. We conclude their duties as to shipments at each port were paired and reciprocal and that performance by the parties as to Lake Charles did not preclude the ap-pellee’s right of cancellation as to Houston. Cf. Corbin on Contracts §§ 688, 695; Simms-Wylie Co. v. City of Ranger, Tex.Civ.App., 224 S.W.2d 265.

Finally, we hold that the appellant’s claims of estoppel and waiver have no basis in fact or in law.

Affirmed.

HOKTON, J.

The plaintiff has taken appeal from the Superior Court’s (Dickson, J.) order granting the defendant’s motion to dismiss made at the close of the plaintiff’s case during a jury-waived trial. Two questions are raised on appeal: (1) by what standard should we review the evidence when a judge grants a motion to dismiss during a jury-waived trial; and (2) whether the court erred in its findings and in its order of dismissal based thereon. We find no errors and affirm.

The plaintiff, Renovest Company (Renovest), entered into a purchase and sale agreement with the defendant, Hodges Development Corporation (Hodges), on June 30, 1986, for a two-building apartment complex in Franklin. The agreed-upon purchase price was $1,476,000 and the initial deposit paid to Hodges at the signing of the contract was $65,000. The contract specified that the deposit would serve as liquidated damages if Renovest failed to close on or before September 3, 1986.

*74Three conditions precedent to the buyer’s obligation to perform were contained in the contract. At issue here are paragraph 3(b), relating to physical inspection of the property, and paragraph 3(d) relating to the buyer’s obtaining financing at certain rates and terms. No portion of the contract stated expressly that time was of the essence. The provision relating to inspection called for the inspection to be completed within fourteen working days, and specified that if the inspection was unsatisfactory, the “Buyer shall have three (3) days from the date of completion of such inspection in which to notify Seller of his disapproval, and this Agreement shall be null and void and all deposits hereunder shall be refunded in full.” The outside date on this condition was July 24. The financing provision contained a forty-five-day limit, after inspection of the seller’s business records, in which the buyer was required to notify the seller of an intention to invoke the financing condition clause. Paragraph 9 of the contract required that all notices be given in writing.

Renovest first inspected the buildings on July 10, 1986, sending a partner and a building inspector. It was during this inspection that Renovest discovered a crack in the exterior of one building, and it consulted with Hodges the next day. Whether Hodges agreed to extend the deadline in order to allow further inspection by Renovest is disputed. Further investigation was performed on July 17 and 23 by another engineer, and his report on August 6 contained his opinion that the building would require “underpinning” of the foundation in order to prevent further settling of the building. Underpinning involves stabilization of the building’s foundation. Based on this report, Renovest wrote to Hodges on August 7, terminating the transaction and demanding return of the $65,000 deposit. Hodges undertook its own engineering study, which commenced with borings on August 12 and culminated in an evaluation report dated August 26. This report described the cracking as cosmetic, found the problem building structurally sound, and rejected the need for underpinning. Hodges shared this report with Renovest.

Renovest did initially undertake to secure the financing by approaching four banks. Two of these, the Bank of New England and the Shawmut Bank, were favorably disposed toward the financing application, up to the time that Renovest notified them of the results of the engineer’s report about the building’s structural problems. Upon receipt of this information, the banks indicated they would not continue to process the loan applications until the issue of the building’s structural soundness was resolved. Although time still remained in which to meet the financing deadline, Renovest never *75pursued the applications further. A second letter sent by Renovest to Hodges on August 12 asserted the failure to obtain financing, as well as an unsatisfactory result of the inspection of Hodges’s books and records, as additional grounds for the termination of the contract. Renovest no longer asserts the books and records contingency as a ground for the termination.

At trial on its suit to obtain return of its deposit, Renovest presented three witnesses and introduced the deposition of a fourth witness. After Renovest rested, Hodges moved to dismiss, both orally and in writing, and the judge granted the motion based on the court’s findings of fact. Rather than making a determination of whether the plaintiff established a prima facie case, the judge specifically concluded that Renovest’s objection to the building’s structure was untimely, and that Renovest prematurely terminated its attempts to obtain financing. He therefore ruled that the plaintiff had failed to carry its burden of proof, and granted the defendant’s motion to dismiss. Renovest appeals the findings of the court, and asserts that, viewing the evidence presented to the judge in the light most favorable to it, Renovest had met its initial burden of presenting a prima facie case.

I. Standard of Review

In most circumstances, the appropriate standard of review for a motion to dismiss (or nonsuit) is to take the evidence presented and determine if, viewed most favorably to the non-moving party, it establishes a prima facie case. Morrill v. Tilney, 128 N.H. 773, 777, 519 A.2d 293, 295 (1986). This standard has previously been applied, at least in one instance, in a bench trial case. See Auclair v. Bancroft, 121 N.H. 393, 395, 430 A.2d 169, 171 (1981).

The defendant, Hodges, urges that, although it would prevail under either standard, this court should adopt a standard recognizing that when the judge is the trier of fact, that judge may make findings of fact at the close of the plaintiff’s case, which findings are entitled to deference upon review, unless clearly erroneous.

In Auclair, a case appealed from an order issued during a jury-waived trial at the same trial juncture as the present case, we applied the standard of viewing all evidence in the light most favorable to the plaintiff. Auclair supra. Auclair arose in a different procedural setting from the case before us today. Rather than dismissing the case on the basis of findings of fact made against the plaintiff, as in the present case, the trial judge in Auclair declined to make findings of fact at the close of the plaintiff’s case, and instead chose to hear the *76defendant’s case. Indeed, the trial judge ultimately made findings of fact in favor of the plaintiff. Id. In reviewing the decision not to make findings of fact, we applied the standard of a prima facie case to justify having the case proceed, as we had no findings of fact to review. If faced with a prima facie case presented by the plaintiff, and if uncertain as to the propriety of making factual findings from the evidence, the trial judge, acting without a jury, certainly has the discretion to require the defendant to proceed. If the defendant is secure in its assessment of the evidence, it may rest its case.

Our standard of review is a common-law, court-developed, doctrine based upon a weighing of the benefits of an expedited trial, and the resulting judicial efficiencies, against the risk of losing what might be developed in extended proceedings. As a court-developed doctrine, an appropriate standard may be established by this court in circumstances where no separate trier of fact exists and we are not, therefore, obligated to preserve a separate prerogative. See Briere v. Briere, 107 N.H. 432, 434, 224 A.2d 588, 590 (1966); Dean v. Smith, 106 N.H. 314, 317, 211 A.2d 410, 412-13 (1965).

We believe the better view is that supported by Hodges. The purpose behind the highly deferential “prima facie” standard for evaluating the plaintiff’s evidence is to permit the issue to go to the jury if it is possible for the jury to resolve the issue in the plaintiff’s favor, to preserve all factual matters that reasonably might be determined against the moving party. See Page v. Parker, 43 N.H. 363, 366 (1861). Therefore, the issue must go to the jury upon the presentation of a prima facie case, regardless of the judge’s view of the weight of the evidence. R. Wiebusch, 5 New Hampshire Practice, Civil Practice and Procedure § 1585, at 298 (1984).

A motion to dismiss, made to the judge in a jury-waived trial at the close of the plaintiff’s case, can challenge the plaintiff’s case in either of two ways. Although both types of motion are referred to as “motions to dismiss” in many jurisdictions, they serve two very separate purposes. One, directed at the judge in his role as judge, is used to assess the legal sufficiency of the case, and is measured by the familiar prima facie standard, taking all evidence introduced and resolving all conflicts in the plaintiff’s favor. The second, however, is a broader one, asking the judge, as the trier of facts, for an expedited disposition. On such a motion, the judge is permitted to render a verdict for the defendant, on the merits, at the close of the plaintiff’s case. Should the judge choose to address the case on the merits at that time, the judge should make findings of fact and assess whether *77the plaintiff has carried his or her burden by a preponderance of the evidence.

The plaintiff has had the chance to prove his or her case, tested by cross-examination, but unchallenged by the defendant’s case-in-chief. The plaintiff has no right to rely on the defendant’s witnesses or exhibits to supply essential elements of his or her case. An alert defendant, perceiving a fatal hole in the plaintiff’s case or satisfied with the state of the record, may rest without putting on a case. The plaintiff has no right to require the defendant to proceed. On the other hand, the defendant should be allowed to test the sufficiency of the plaintiff’s proof before making the decision to proceed.

In a case where the judge is also serving as the trier of fact, the judge can halt the trial at the close of the plaintiff’s case when he or she determines that the facts, as presented, will not be sufficient to meet the burden of establishing the case. The judge need not review the evidence by the prima facie standard to see if the plaintiff might meet the burden, based on possible findings of fact, but rather, as the trier of fact, can evaluate whether the plaintiff has actually met the burden to the court’s satisfaction. The “prima facie case means little or nothing in a case tried to the court where it is clear, as it is here, that the trial court has weighed the evidence and found that the [claim] was not established.” Totem Equip. Co. v. Critchfield Log. Co., 62 Wash. 2d 175, 178, 381 P.2d 738, 739 (1963). “[T]he trial court was the trier of the facts, and in considering the evidence was not bound to view it in a light most favorable to the plaintiff, with all attendant favorable presumptions, but was bound to take an unbiased view of all the evidence, direct and circumstantial, and accord it such weight as he believed it entitled to receive.” Allred v. Sasser, 170 F.2d 233, 235 (7th Cir. 1948). Quite simply, if the trial judge determines that the plaintiff has failed to present evidence which may persuade the judge at the close of the case, by a preponderance of the evidence, no need exists to hear the case in defense.

This standard of review has been adopted in whole or in part in the procedural rules of many States. See, e.g., Teodonno v. Bachman, 158 Colo. 1, 4, 404 P.2d 284, 285 (1965); Warner Corporation v. Magazine Realty Co., 255 A.2d 479, 481 (D.C. 1969); Pichulik v. Air Conditioning & Heating Service Co., 123 Ga. App. 195, 196-97, 180 S.E.2d 286, 288 (1971); Grieser v. Haynes, 404 P.2d 333, 335-36 (Idaho 1965); Neasham v. Day, 34 N.C. App. 53, 55, 237 S.E.2d 287, 288 (1977). It has also been applied by courts in States where the rules of civil procedure do not include it. See N. Fiorito Co. v. State, *7869 Wash. 2d 616, 618-19, 419 P.2d 586, 588 (1966). We hold that when the trial judge is sitting as the trier of fact, he or she appropriately may make findings of fact at the close of the plaintiff’s case-in-chief, and may use such facts to determine whether the plaintiff has established the case by a preponderance of the evidence. On appeal, we will not overrule these findings of fact, unless they are clearly erroneous, nor will we reverse the dismissal based thereon unless it is inconsistent with the findings or otherwise contrary to law.

II. Time of the Essence

In his order dismissing the complaint, the trial judge found that time was of the essence for the exercise of the rights under the conditions precedent. The judge based his conclusion on the strict time provisions applicable to performance of the conditions, concluding that these provisions required strict compliance with the timetables established. The court therefore determined that the late notification precluded the plaintiff’s invoking its right to terminate the agreement under the physical inspection condition. The court apparently also determined that no waiver of the deadline occurred during the relevant period.

Renovest correctly asserts that ordinarily time is not made of the essence in a contract, absent some indication that the parties intended otherwise. Moore v. Sterling Warner Indus. Inv. Corp., 114 N.H. 520, 522, 323 A.2d 581, 583 (1974). The mere fact that a date is stated in the contract is not sufficient, by itself, to alter this rule. Id. Renovest argues that the issue must be resolved based on the evidence adduced at trial up to the point of the judge’s dismissal, and that none of this evidence established that time was of the essence. Citing Allard & Geary, Inc. v. Faro, 122 N.H. 573, 448 A.2d 377 (1982) (evidence that word “before” was inserted by closing date, as well as that defendant orally informed buyer that time was crucial), Renovest asserts that the trial judge incorrectly applied our precedents to find sufficient indicia of such intent.

Renovest’s argument is inapplicable in the present case, because the terms involved are express conditions precedent. The plaintiff’s duty to perform under the contract was made “subject to” performance of these conditions. Where “the occurrence of a condition is required by the agreement of the parties, rather than as a matter of law, a rule of strict compliance traditionally applies.” E.A. Farnsworth, Contracts § 8.3, at 544 (8th ed. 1982); see also 5 S. Williston, Contracts § 669 (3d ed. 1961). The reasoning behind *79this rule is that when the parties expressly condition their performance upon the occurrence or non-occurrence of an event, rather than simply including the event as one of the general terms of the contract, the parties’ bargained-for expectation of strict compliance should be given effect. Therefore, absent waiver or extension by the defendant, written notification of disapproval of the building inspection was required to be given by Renovest no later than July 24. Lemay v. Rouse, 122 N.H. 349, 351-52, 444 A.2d 553, 555 (1982). The trial court’s finding of absence of timely compliance with the building inspection condition is correct.

III. Waiver of Terms

Renovest further argues that the express condition’s deadline for notification was waived by Hodges in the July 11 phone conversation. During this conversation, Hodges’s vice president, Barry Sanborn, agreed with Renovest’s suggestion that Renovest hire a structural engineer to conduct further inspection. Renovest takes this approval to be a waiver of the notification time limit. We disagree.

A finding of waiver must be “based upon an intention expressed in explicit language to forego a right, or upon conduct under the circumstances justifying an inference of a relinquishment of it.” Kilgore v. Association, 78 N.H. 498, 502, 102 A. 344, 346 (1917). A waiver may be express or implied. Renovest does not assert an express waiver.

Whether an implied waiver occurred is a question of fact, and we will not overturn the trial judge’s determination that no waiver occurred, unless such finding is clearly erroneous. See D.M. Holden, Inc. v. Contractor’s Crane Serv., Inc., 121 N.H. 831, 834, 435 A.2d 529, 531 (1981). Thomas Sheedy, one of the partners in Renovest, testified at trial that Hodges’s acquiescence in the follow-up inspection left him with the impression that he would get an extension of time. Although Renovest did introduce evidence that Hodges suggested the hiring of a structural engineer, Hodges responds that this suggestion does not show an intent to extend the time limit, because there were still ten days remaining in which the inspection could be accomplished.

All the evidence presented by Renovest does not compel the trier of fact to believe the assertion that a waiver occurred. See 93 Clearing House, Inc. v. Khoury, 120 N.H. 346, 350, 415 A.2d 671, 674 (1980). The trier of fact may simply choose to disbelieve a witness. See id. The judge could have based his conclusion on the cross-examination of Mr. Sheedy, which went as follows:

*80“Q. Are you telling us that Hodges told you that the termination deadline of paragraph 3-B was being waived?

A. When I made my inspection, they agreed I’d get a structural engineer after July 10th.

Q. They agreed you would get a structural engineer after July 10th?

A. Yes.

Q. They told you that?

A. Yes.

Q. That is not the same thing as saying we agreed to extend the deadline date under paragraph 3-B.

A. I took it to mean there was an extension.

Q. Did anyone say there was an extension of the termination date under 3-B?

A. Not in writing.

Q. Did they say it verbally?

A. They said we were allowed to go get a structural engineer.

Q. You have told us that, but did they tell you you were allowed to extend the time to terminate it?

A. No.

Q. And you never did request an extension in writing, did you?

A. No, I asked them for it.

Q. You never got an extension in writing.

A. I didn’t get it in writing.”

The contract that the parties agreed to recited that “this Agreement may not be changed orally, but only by an agreement in writing, duly executed by or on behalf of the party or parties against whom enforcement or any waiver ... is sought.” No writing invoking the physical inspection termination condition was sent until August 7.

As it was Renovest’s duty to establish a waiver, the judge was not obligated to wait for credible evidence that no waiver occurred. Viewing this evidence, we cannot conclude that the trial judge’s finding was clearly erroneous.

*81IV. Financing Condition

Renovest asserts that it was unable to obtain financing for the project and, therefore, was excused from performing by paragraph 3(d). That paragraph, under the heading “Conditions Precedent to Buyers [sic] Obligation to Perform,” reads:

“d. This Agreement is subject to Buyer obtaining a written commitment for First Mortgage financing from a lending institution with the following terms.... The commitment to be obtained within 45 days from the date of Buyers [sic] receipt of the books and records. Buyer shall notify Seller in writing within 45 days from review of the books and records of his intention to exercise the right to terminate this Offer under this mortgage contingency clause.”

We also reject Renovest’s reliance upon this provision.

Under New Hampshire law, every contract contains an implied covenant of good faith performance and fair dealing. Seaward Constr. Co. v. City of Rochester, 118 N.H. 128, 129, 383 A.2d 707, 708 (1978). Reasonable efforts must be undertaken to secure financing. Lach v. Cahill, 138 Conn. 418, 422, 85 A.2d 481, 482 (1951). While initially Renovest met this duty, by initiating the loan process, its later conduct supports the trial judge’s finding that performance of the agreement was not excused by Renovest’s inability to obtain financing. Renovest asserts that it sought the financing required under the contract, but after making the lending institutions aware of the purported construction deficiencies, it assumed that financing would be unavailable.

The question whether any structural defects were material to financing rested solely with the banks. Having undertaken to secure financing, Renovest was committed to affirmatively seeking such financing, with activity “reasonably calculated to obtain the approval by action or expenditure not disproportionate in the circumstances.” Stabile v. McCarthy, 336 Mass. 399, 404, 145 N.E.2d 821, 824 (1957). Reasonable efforts by Renovest were required to determine and communicate the accurate status of the observed building flaws. The evidence showed that the engineering report reflecting absence of structural defects was not shared with the interested banks. The record lends ample support to the trial court’s finding that Renovest’s attempts to secure financing were terminated prematurely.

The ultimate determination of whether to provide financing is one for the lender, and Renovest’s unilateral belief that financing would *82be unavailable due to the structural defect is insufficient to excuse it from performing under the financing condition. If Renovest felt an obligation to provide the banks with information about the structure, then it should provide all information it had. It cannot choose to release information selectively. While this does not impose a duty to misrepresent information submitted to the lenders, see Trading Co. v. Jensen, 200 Va. 744, 749, 107 S.E.2d 441, 444 (1959), there is an obligation to provide credible information supporting its application. Such information was in the applicant’s hands, indicating that the structure was sound. There was no evidence presented that financing would be unavailable from the banks had they, in the words of Sta-bile, “been afforded opportunity to examine a more skillfully prepared plan, reasonably adjusted to meet the problems encountered during its preparation.” 336 Mass. at 406, 145 N.E.2d at 825. Provided the lender’s requests for information are reasonable, there is an obligation on buyers to seek approval, even if they, themselves, believe the effort to be futile. Use of the information in the financing decision is determined by the lending banks.

Applying these considerations to the record before us, we conclude that the trial judge could have determined that Renovest failed to make a good faith effort to secure financing and prematurely terminated its loan application effort. The question of the reasonableness of such effort is for the trier of fact to decide. See Allview Acres v. Howard, 229 Md. 238, 244, 182 A.2d 793, 796 (1962). The record discloses that both the Shawmut Bank and the Bank of New England indicated they were “favorably disposed” to going forward with the loan, provided the structural problem was resolved as not being severe. This falls short of showing that an appropriate application, accompanied by all available information, would have been rejected or have been an empty gesture. Stabile, 336 Mass. at 406, 145 N.E.2d at 825. The deposition of Shawmut’s loan officer, introduced into evidence, succinctly shows the dilemma of the bank. In responding to a question on whether the bank had undertaken an investigation of the structural questions, the loan officer responded:

“A. ... I might have been tempted to have, were we really interested in doing the loan, have the bank commission a separate engineering study using someone of our choosing.

Q. Did you go to that stage?

*83A. No, because I think it was clear to me that — well, for two reason[s]: one, I think the borrowers were having some questions themselves about whether they wanted to proceed based on their own engineering report, and if they’re questioning it there’s no point in me having the bank involved at that point. That’s why I said that they should do their best to resolve the issue, and then if they wanted to re-present it, they could, but they didn’t.”

Based on this evidence, the trial judge could have concluded that Renovest failed to make reasonable efforts to obtain the loan, and further concluded, as did the loan officer, that Renovest did not really wish to proceed with the loan process. Although Renovest concluded that the banks would not give financing, based on its own engineer’s report, the fact that Renovest was aware of Hodges’s engineering report stating that the building was structurally sound, and yet did not submit this in support of its application, could support a conclusion that Renovest did not use all reasonable efforts to obtain financing.

The fact finder below reasonably could have reached the conclusion that Renovest could not invoke the financing contingency because it prematurely ceased its efforts to secure financing.

Affirmed.

BROCK, C.J., and JOHNSON, J., did not sit; the others concurred.

*841BOYD, Acting Chief Justice.

We issued an order allowing certiorari in these two causes because the decisions in them of the District Court of Appeal, Second District, conflict with the decision in Edward J. Gerrits, Inc. v. Astor Electric Service, Inc., 328 So.2d 522 (Fla.3d DCA 1976).1 The two causes have been consolidated for all appellate purposes in this Court because they involve the same issue. That issue is whether the plaintiffs, Modern Air Conditioning and Overly Manufacturing, were entitled to summary judgments against Peacock Construction Company in actions for breaches of identical contractual provisions.

Peacock Construction was the builder of a condominium project. Modern Air Conditioning subcontracted with Peacock to do the heating and air conditioning work and Overly Manufacturing subcontracted with Peacock to do the “rooftop swimming pool” work. Both written subcontracts provided that Peacock would make final payment to the subcontractors,

“within 30 days after the completion of the work included in this sub-contract, written acceptance by the Architect and full payment therefor by the Owner.”2

Modern Air Conditioning and Overly Manufacturing completed the work specified in their contracts and requested final payment. When Peacock refused to make the final payments the two subcontractors separately brought actions in the Lee County Circuit Court for breach of contract. In both actions it was established that no deficiencies had been found in the completed work.3 But Peacock established that it had not received from the owner4 full payment for the subcontractors’ work. And it defended on the basis that such payment was a condition which, by express term of the final payment provision, had to be fulfilled before it was obligated to perform under the contract. On motions by the plaintiffs, the trial judges granted summary judgments in their favor. The orders of judgment implicitly interpreted the contract not to require payment by the owner as a condition precedent to Peacock’s duty to perform.

The Second District Court of Appeal affirmed the lower court’s judgment in the appeal brought by Modern Air Conditioning.5 In so doing it adopted the view of the majority of jurisdictions6 in this country that provisions of the kind disputed here do not set conditions precedent but rather constitute absolute promises to pay, fixing payment by the owner as a reasonable time for when payment to the subcontractor is to be made. When the judgment in the Overly Manufacturing case reached the Second District Court, Modern Air Conditioning had been decided and the judgment, therefore, was affirmed on the authority of the *842latter decision.7 These two decisions plainly conflict with Gerrits, supra.

In Gerrits, the Court had summarily ordered judgment for the plain tiff/subcontractor against the defendant/general contractor on a contractual provision for payment to the subcontractor which read,

“The money to be paid in current funds and at such times as the General Contractor receives it from the Owner.” Id. at 523.

In its review of the judgment, the Third District Court of Appeal referred to the fundamental rule of interpretation of contracts that it be done in accordance with the intention of the parties. Since the defendant had introduced below the issue of intention, a material issue, and since the issue was one that could be resolved through a factual' determination by the jury, the Third District reversed the summary judgment and remanded for trial.

Peacock urges us to adopt Gerrits as the controlling law in this State. It concedes that the Second District’s decisions are backed by the weight of authority. But it argues that they are incorrect because the issue of intention is a factual one which should be resolved after the parties have had an opportunity to present evidence on it. Peacock urges, therefore, that the causes be remanded for trial. If there is produced no evidence that the parties intended there be condition precedents, only then, says Peacock, should the judge, by way of a directed verdict for the subcontractors, be allowed to take the issue of intention from the jury.

The contractual provisions in dispute here are susceptible to two interpretations. They may be interpreted as setting a condition precedent or as fixing a reasonable time for payment. The provision disputed in Gerrits is susceptible to the same two interpretations. The questions presented by the conflict between these decisions, then, are whether ambiguous contractual provisions of the kind disputed here may be interpreted only by the factfinder, usually the jury, or if they should be interpreted as a matter of law by the court, and if so what interpretation they should be given.

Although it must be admitted that the meaning of language is a factual question, the general rule is that interpretation of a document is a question of law rather than of fact. 4 Williston on Contracts, 3rd Ed., § 616. If an issue of contract interpretation concerns the intention of parties, that intention may be determined from the written contract, as a matter of law, when the nature of the transaction lends itself to judicial interpretation. A number of courts, with whom we agree, have recognized that contracts between small subcontractors and general contractors on large construction projects are such transactions. Cf. Thos. J. Dyer Co. v. Bishop International Engineering Co., 6 Cir., 303 F.2d 655 (1965). The reason is that the relationship between the parties is a common one and usually their intent will not differ from transaction to transaction, although it may be differently expressed.

That intent in most cases is that payment by the owner to the general contractor is not a condition precedent to the general contractor’s duty to pay the subcontractors. This is because small subcontractors, who must have payment for their work in order to remain in business, will not ordinarily assume the risk of the owner’s failure to pay the general contractor. And this is the reason for the majority view8 in this country, which we now join.

Our decision to require judicial interpretation of ambiguous provisions for final payment in subcontracts in favor of subcontractors should not be regarded as anti-general contractor. It is simply a recognition that this is the fairest way to deal with the problem. There is nothing in this opinion, however, to prevent parties to these contracts from shifting the risk of payment failure by the owner to the subcontractor. But in order to make such a shift the con*843tract must unambiguously express that intention. And the burden of clear expression is on the general contractor.

The decisions, of the Second District Court of Appeal to affirm the summary judgments were correct. We adopt, therefore, these two decisions as the controlling law in Florida and we overrule Gerrits, to the extent it is inconsistent with this opinion.

The orders allowing certiorari in these two causes are discharged. It is so ordered.

ENGLAND, SUNDBERG, HATCHETT and KARL, JJ., concur.

Wolff, Judge.

Monogram Plus, Inc. (“MPI”) appeals from a summary judgment rendered in favor of David D. Hutton. In granting the summary judgment, the trial court determined that, as a matter of law, a satisfaction clause contained in a franchise agreement executed by MPI and Hutton called for Hutton’s subjective satisfaction as to what qualified as “suitable financing.”

The following facts are largely undisputed.

On August 4, 1989, Hutton and MPI executed a franchise agreement wherein MPI sold a monogramming franchise to Hutton. Hutton purchased the MPI franchise for $25,000. The terms of the agreement specified that MPI granted a nonexclusive ten-year license to Hutton to operate an MPI store. Pursuant to the agreement, Hutton was obligated to market and promote the retail sale of monogrammed items such as T-shirts, fleece wear, and jackets. On August 17, 1989, Hutton and MPI executed an addendum to *178the franchise agreement. The addendum supplemented the franchise agreement, providing in part that if Hutton were “unable * * * to obtain financing suitable to him” within ninety days of signing the franchise agreement, he would then be entitled to a refund of the $25,000 franchise fee. Hutton was responsible for the drafting of the addendum.

There were two primary areas of expenditure involved in the funding of the monogramming enterprise: the “start up” costs, and the purchase or lease of a Meistergram 800 XLC computerized monogramming machine. The purchase or lease of the monogramming machine represented a critical component of the required financing because the entire operation revolved around the application of monograms to imprintable items of clothing.

After executing the franchise agreement and addendum, Hutton obtained a $26,000 loan from Star Bank to cover the start-up costs of the business operation. The loan was secured by a mortgage executed by Hutton and his wife Pamela against their residence.

To facilitate the lease or purchase of the monogramming machine, MPI issued a franchise offering circular to Hutton. The circular, which MPI was required to provide under Ohio law, estimated that the total cost of an MPI franchise varied between $32,420 and $36,720, with an additional $9,150 to $31,150 cost for construction. The fee paid by Hutton accounted for $25,000 of the $36,720 total estimated franchise cost. The circular also estimated that the monogramming machine could be leased for $520, excluding taxes, per month for sixty months, or purchased at a cost of $21,000.

After receiving the circular, Hutton spoke with MPI representative Pam Totty, who functioned as a liaison between Dennis Hanley, MPI’s financial director, and MPI franchisees. One of Totty’s duties in this capacity was to assist MPI franchisees in securing leases for monogramming equipment. On November 20, 1989, Totty notified Hutton that she had secured a sixty-month lease through United Leasing Corporation. The monthly lease payments totalled $751.01, excluding taxes, with a total equipment cost of $45,060.60 over the life of the lease. The lease also required Hutton to make a ten percent down payment on the purchase price, which was listed at $24,751. Since Hutton considered these terms to be substantially less advantageous than the terms offered in the MPI circular, he rejected the financing. He then requested Totty to submit his application to Trinity Leasing despite the fact that she had told him that he did not meet Trinity’s minimum leasing qualifications. At Hutton’s insistence, Totty submitted his application to Trinity, which subsequently rejected it due to Hutton’s inadequate financial position. When Totty notified Hutton that the application had been rejected, she recommended that he pursue other avenues of financing. In order to help *179Hutton obtain financing from other sources, Dennis Hanley prepared a financial statement for Hutton which Hutton then submitted with a loan application to Society Bank in December 1989. This application was rejected because of insufficient collateral.

On January 1, 1990, Hutton wrote to Larry Meyer, MPI’s president, requesting a refund of the $25,000 franchise fee due to the difficulty he had experienced in securing financing. This request was denied. On March 5, 1990, Hutton filed a three-count complaint against MPI. In the first count, Hutton sought to recover the franchise fee. In the second count, Hutton sought to recover $1,000, representing the cost of an airline ticket he had purchased to attend MPI’s mandatory franchise school in Texas, and other expenses incurred in attending the school. In the third count, Hutton sought punitive damages, alleging that MPI’s failure to refund $26,000 to him was done in willful and intentional disregard of his financial interest.

MPI counterclaimed on April 9, 1990, alleging, inter alia, that Hutton had breached the franchise agreement by failing to perform his obligations pursuant to the franchise agreement. According to MPI, Hutton’s breach caused MPI to lose the opportunity to offer Hutton’s franchise to others as well as the loss of a weekly royalty fee of six percent of Hutton’s gross sales and one percent of the gross revenues payable to MPI as an advertising fee. MPI also sought attorney fees to which it alleged it was entitled under the terms of the franchise agreement.

Hutton moved for summary judgment on June 1, 1990, arguing that the language of the addendum clearly and unambiguously gave him the sole right to determine what financing was suitable to him. He claimed that since he failed to find financing which was in fact suitable to him, he was entitled as a matter of law to the return of the $25,000 franchise fee. In support of his motion, Hutton offered his sworn affidavit as well as the notice of the rejection of his loan application by Society Bank and excerpts from MPI’s franchise circular. In rebuttal, MPI offered the affidavits of Pam Totty, Dennis Hanley, and Roger Guertin, the vice-president of Trinity Leasing. MPI also attached a copy of Hutton’s response to MPI’s interrogatories, which Hutton had filed on June 21, 1991.

There was a dispute over whether Hutton’s father-in-law, Charles Allport, was a potential source of financing. Interrogatory No. 9 requested Hutton to:

“Describe in detail the terms and conditions of any financing agreements and/or arrangements, and/or any support agreements and/or arrangements, between yourself and Charles Allport.”

Hutton responded that there was no such arrangement between himself and Allport. However, in Paragraph 5 of Dennis Hanley’s affidavit, Hanley *180averred that Hutton had represented to him that if the $26,000 loan was insufficient, he could obtain whatever additional funds were needed from his father-in-law. Hanley also averred in Paragraph 6 that he had had various conversations with Allport wherein Allport referred to himself as an investor in Hutton’s franchise. Hanley swore that Allport’s conduct was consistent with Hutton’s representations that Allport would supply additional funding for the franchise if necessary.

The trial court entered judgment on August 3, 1991, granting Hutton’s motion. Hutton subsequently dismissed, without prejudice, the second and third counts of his complaint.

Key to the trial court’s determination was its finding that the language of the addendum was clear and unambiguous. Based on this finding the court concluded that:

“The $25,000 franchise fee was refundable if within 90 days Plaintiff was unable to obtain financing suitable to him. [Emphasis sic.] Defendants \sic] chose to live with the subjective language employed in the agreement and did not specify any steps Plaintiff would have to take in order to satisfy the condition. The language did not require the Plaintiff to accept any available financing, nor did it require the Plaintiff to exhaust all possible options in an effort to obtain financing. As a consequence Defendants \sic] must live with the agreement entered. This Court finds that the Plaintiff’s efforts to obtain financing were adequate pursuant to the terms of the agreement in that the first available financing method was clearly out of line with the terms suggested by the Defendant company. The second attempt to obtain financing with a firm which often participates in leasing agreements with franchisees of the Defendant rejected Plaintiff’s application without consideration because the Plaintiff did not meet the necessary requirements. The third attempt Plaintiff made to obtain financing through a local bank was rejected because Plaintiff did not have enough collateral. Plaintiff is not required to search endlessly when it seems further efforts will meet with similar results.”

MPI has appealed, raising a single assignment of error as follows:

“The entry of summary judgment in the plaintiff’s favor upon the claim asserted in the 'first branch’ of the complaint, and against the defendant upon its counterclaim, was error.”

MPI advances two arguments in support of this assignment.

I. THE ADDENDUM LANGUAGE IS AMBIGUOUS

MPI first argues that the language of the addendum was ambiguous wherein it predicated Hutton’s right to a refund upon his ability to secure *181financing which was “suitable to him.” According to MPI, these words were susceptible to three interpretations. “Suitable to him” could mean that the financing had to be “suitable as determined by Hutton,” “suitable for Hutton,” or “suitable for Hutton’s needs.” We agree with the trial court’s holding that the language of the addendum created no ambiguity. However, this does not dispose of the appeal because a question of interpretation remains.

Contract clauses which make the duty of performance of one of the parties conditional upon his satisfaction are generally referred to as “satisfaction clauses.” These clauses have been divided by the courts into two categories, and have been interpreted in accordance with the category. Mattei v. Hopper (1958), 51 Cal.2d 119, 121, 330 P.2d 625, 626.

Where the satisfaction clause requires satisfaction as to such matters as commercial value or quality, operative fitness, or mechanical utility, dissatisfaction cannot be claimed unreasonably. In these contracts, an objective standard is applied to the satisfaction clause and the test is whether the performance would satisfy a reasonable person. Id.; Cranetex, Inc. v. Precision Crane & Rigging of Houston, Inc. (1988), 760 S.W.2d 298, 301-302.

If, on the other hand, the satisfaction clause relates to matters involving fancy, personal taste, or judgment, then a subjective standard is applied, and the test is whether the party is actually satisfied. Id. Although application of a subjective standard to a satisfaction clause would seem to give the obligor virtually unlimited latitude to avoid his duty of performance, such is not the case. In these situations, courts impose the limitation that the obligor act in good faith. Mattei, supra, 51 Cal.2d at 121, 330 P.2d at 626. Thus, under the subjective standard, the promisor can avoid the contract as long as he is genuinely, albeit unreasonably, dissatisfied. Which standard applies in a given transaction is a matter of the actual or constructive intent of the parties, which, in turn, is a function of the express language of the contract, or the subject matter of the contract. Kadner v. Shields (1971), 20 Cal.App.3d 251, 262-263, 97 Cal.Rptr. 742, 751-752.

This court has previously held that an objective standard applies to contracts containing satisfaction clauses. Enterprise Roofing v. Howard Investment (1957), 105 Ohio App. 502, 505, 6 O.O.2d 232, 233, 152 N.E.2d 807, 810. However, we neither explained why an objective standard applied in that case nor distinguished between those contracts which require a subjective assessment of satisfaction by a court and those which require an objective assessment. This distinction is critical to the disposition of this appeal. Although we did not address this distinction in our holding in Enterprise Roofing, we *182did not say that an objective standard applies to every satisfaction clause in every contract.

The Hamilton County Court of Appeals has twice recently considered contracts containing satisfaction clauses. In Superior Die & Eng. v. Gen. Chain & Mfg. Corp. (Aug. 15, 1984), Hamilton App. No. C-830748, unreported, 1984 WL 6958, the court cited Enterprise Roofing and held that “where performance is to be measured by the satisfaction of a party to a contract, the general view has been that an objective standard of reasonableness will apply to assess the sufficiency of performance.” Superior Die also recognized that an exception existed where the subject matter of the contract involved individual taste, personal convenience, or individual preference. Id. at fn. 1. The court reached the same result in Loft v. Sibcy-Cline Realtors (Dec. 13, 1989), Hamilton App. No. C-880446, unreported, 1989 WL 149667, relying on Enterprise Roofing and Superior Die.

In addition to considering these Ohio cases, we find it helpful to examine how other jurisdictions have considered the question of whether to apply an objective or subjective standard in determining whether the trial court applied the correct standard.

As to the appropriate standard, other jurisdictions have categorized satisfaction clauses in the same manner as did Kadner v. Shields, supra. For example, a subjective standard governs when the language of the contract expressly calls for the application of such a standard. An example of such language is found in Ard Dr. Pepper Bottling Co. v. Dr. Pepper Co. (C.A.5, 1953), 202 F.2d 372.

Ard dealt with a satisfaction clause contained in a commercial licensing agreement which granted to Ard the exclusive license to bottle Dr. Pepper soda in a designated territory. The satisfaction clause at issue reserved Dr. Pepper Co.’s right to rescind Ard’s license if Ard did not faithfully promote the sale of the Dr. Pepper product to Dr. Pepper Co.’s satisfaction. The satisfaction clause at issue was as follows:

“ ‘(e) To at all times loyally and faithfully promote the sale of and secure thorough distribution of Dr. Pepper throughout every part of said territory and to all dealers therein, and to develop an increase in volume of sales of Dr. Pepper satisfactory to the Grantor. And in this connection, the Grantee agrees, represents and guarantees that the said territory included in this license, and every part thereof, and all dealers therein, ca-, \sic ] and will be fully covered, solicited and worked by the Grantee in a systemkatic [sic ] and business-like manner now, and at all times hereafter while this license agreement remains in effect.

*183“ ‘The determination and judgment of Dr. Pepper Company as to whether or not this clause is being complied with when made in good faith, shall be sole, exclusive and final, and such determination by the Dr. Pepper Company that this clause is not being complied with shall * * * be grounds for forfeiture of this license. * * *

« < * * *

“ ‘(k)5. That in case of the violation of any one or more of the terms or provisions of this license agreement by the Grantee or in the event Grantee fails, within the judgment of the Grantor, to faithfully comply with provisions as above set out, then Grantor shall be entitled to cancel or terminate this license upon giving written notice mailed to Grantee by registered mail and addressed to his last known place of business, and upon notice being given of such cancellation as herein provided, this license agreement and all rights hereunder shall be terminated and at an end, provided, however, that in the event of the termination of this license agreement as herein provided, or in any other manner, such termination shall not release the Grantee from the payment of any amount which may then be owing to Grantor. And upon any termination of this license agreement Grantee shall discontinue the use of the name of “Dr. Pepper” and the bottling of said product. The judgment and determination of Dr. Pepper Company when made in good faith, as to the failure of Grantee to comply with any of the terms of this license, shall be, and is hereby, made conclusive and final. * * *’ ” Id. at 374-375.

The decision in Ard to measure Dr. Pepper Co.’s satisfaction according to a subjective standard rested upon the construction of the contract terms which gave Dr. Pepper Co. the right to revoke Ard’s license. The circuit court, agreeing with the district court’s judgment, found that the contract expressly provided that absent bad faith, Dr. Pepper Co.’s judgment on the matter was conclusive. Id. at 376. The contract expressly made Dr. Pepper Co. the sole arbiter of satisfaction, circumscribed only by the exercise of its good faith judgment. Thus, the express language of the contract implicated a subjective standard of satisfaction.

In this case, we are not presented with an Ard-like situation where the contract language clearly mandated that Hutton’s satisfaction be assessed subjectively. Nowhere in the addendum does it state, as it did in the Ard contract, quoted supra, that Hutton’s judgment as to the suitability of financing was to be “sole, exclusive or final.” Nor did it impose a “good faith” limitation on his judgment. (Even if Hutton’s satisfaction as to the financing were to be assessed subjectively, he was still required to present evidence that he was, in good faith, dissatisfied with the available financing. Since Hutton presented no evidence as to the genuineness of his dissatisfac*184tion, the court should not have, for this additional reason, granted summary judgment in his favor.)

The addendum contained only a general satisfaction clause. The fact that a contract contains a general satisfaction clause, without more, does not mandate the application of a subjective standard. Absent express contract language, courts have looked to the nature of the contract as an indicator of which standard governs. In these cases, there still is no clear line of demarcation. Generally, the subjective standard applies to contracts involving matters of aesthetic taste, feasibility of operation, or management, regardless of financial impact. The objective standard of the reasonable person is generally applied where commercial or financial matters are involved. Kadner, supra, 20 Cal.App.3d at 263, 97 Cal.Rptr. at 752; Cranetex, Inc. v. Precision Crane & Rigging of Houston, Inc., supra; Mattei v. Hopper, supra. This is not to say that a subjective standard is always inapplicable to a contract involving commercial transactions. Mattei v. Hopper, supra.

Mattei involved an action for breach of contract by a purchaser against a vendor who failed to convey real estate in accordance with the terms of a deposit receipt executed by the parties. The real estate was to be developed into a commercial shopping center. The concluding paragraph of the deposit receipt contained a satisfaction clause which conditioned the purchaser’s tender of the payment of the balance of the purchase price upon a bank’s obtaining leases for the tenants of the shopping center which were satisfactory to the purchaser. The purchaser complied with the preliminary terms of the deposit receipt, but the vendor repudiated the contract while the purchaser was in the process of obtaining the leases. The purchaser secured satisfactory leases and offered payment of the balance due on the contract. The vendor refused to tender the deed. The precise issue in Mattei was whether the condition of the purchaser’s “satisfaction,” which satisfaction the court determined was to be scrutinized on a subjective basis, rendered the agreement illusory and unsupported by consideration, and thus unenforceable against the vendor.

While recognizing that an objective standard generally applied where the condition called for satisfaction as to commercial value or quality, as was the case therein, the California Supreme Court nevertheless applied a subjective standard. The court so concluded because application of an objective standard was impracticable under the facts presented:

“ * * * [I]t would seem that the factors involved in determining whether a lease is satisfactory to the lessor are too numerous and varied to permit the application of a reasonable man standard as envisioned by this line of cases. *185Illustrative of some of the factors which would have to be considered in this case are the duration of the leases, their provisions for renewal options, if any, their covenants and restrictions, the amounts of the rentals, the financial responsibility of the lessees, and the character of the lessees’ businesses.

“This multiplicity of factors which must be considered in evaluating a lease shows that this case more appropriately falls within the second line of authorities dealing with ‘satisfaction’ clauses, being those involving fancy, taste, or judgment. Where the question is one of judgment, the promisor’s determination that he is not satisfied, when made in good faith, has been held to be a defense to an action on the contract.” (Citations omitted.) Id., 51 Cal.2d at 128, 330 P.2d at 627.

Such a holding is consistent with the view taken by the Restatement of the Law 2d, Contracts (1981), Section 228, which states:

“When it is a condition of an obligor’s duty that he be satisfied with respect to the obligee’s performance * * * and it is practicable to determine whether a reasonable person in the position of the obligor would be satisfied, an interpretation is preferred under which the condition occurs if such a reasonable person in the position of the obligor would be satisfied.” (Emphasis added.)

(The California Supreme Court rejected the vendor’s contention that the subjective nature of the purchaser’s satisfaction rendered the argument unenforceable.)

In this case, the evidence fails to establish that it would have been impracticable to apply an objective standard to the addendum. Hutton presented no evidence of impracticability. Indeed, he only presented evidence and argument as to the unambiguous nature of the addendum’s language, resting his motion on the alleged inherently subjective nature of the language. Therefore, absent evidence of impracticability, we consider whether the nature of the contract indicated which standard controlled. We find Kadner v. Shields, supra, to be instructive.

Kadner involved a breach of contract action stemming from a dispute over a real estate sale. The buyers had agreed to purchase a luxury tract home in Beverly Hills subject to their satisfaction with the terms and conditions of an encumbrance they were to assume which was contained in an escrow agreement. If they were dissatisfied with the terms of the encumbrance, the escrow agreement stated that they were entitled to the return of their partial down payment. Id., 20 Cal.App.3d at 254, 97 Cal.Rptr. at 745. In reversing the trial court’s judgment which held that the buyers’ approval had to be measured according to a subjective standard, the court of appeals examined *186when satisfaction is measured by an objective standard and by a subjective standard. The court held that:

“Which test is to be used in a given transaction is a matter of actual or constructive (legally presumed) intent of the parties. * * * The choice can be settled of course by explicit language in the instrument. We feel that that is lacking in the instant case. So it is one of constructive intent. The absence of such explicitness in the instant case militates against a judicial decision in favor of the subjective personal judgment criterion in two ways: * * * In the absence of a specific expression in the instrument or a clear indication from the nature of the subject matter, the preference of the law is for the less arbitrary standard of the reasonable man.” Id., 20 Cal.App.3d at 262-263, 97 Cal.Rptr. at 751-752.

In this case, the franchise agreement was clearly commercial in nature and pertained to matters of financial concern. Without express language to the contrary, or evidence of impracticability, the commercial nature of the contract, without more, dictated that Hutton’s satisfaction had to be measured objectively.

There was nothing unique about this commercial contract that would implicate a subjective assessment of Hutton’s satisfaction. Indeed, this contract presents a classic example of an arm’s-length business transaction in which reasonable business concerns, relevant to the financing of equipment, dictated the terms of the contract.

Based on the foregoing analysis, we hold that, in the absence of express language to the contrary, or evidence of impracticability of application, an objective standard governs satisfaction clauses in contracts which involve commercial and financial matters. Accordingly, we conclude that the trial court improperly applied a subjective standard in assessing Hutton’s satisfaction.

II. GENUINE ISSUES OF MATERIAL FACT EXIST AS TO WHETHER HUTTON WAS “UNABLE” TO LOCATE FINANCING SUITABLE TO HIM.

This argument requires us to determine whether the trial court correctly found that there was no genuine issue of material fact as to Hutton’s inability to locate financing. This poses a discrete query separate from the issue of. the suitability of available financing. In their briefs, the parties agree that even if the satisfaction clause were assessed according to a subjective standard, a separate “good faith” standard would govern the determination of whether Hutton was able to secure financing. The good faith inquiry focuses on whether Hutton exerted a reasonable effort to locate *187suitable financing. The following undisputed facts are relevant to this inquiry.

Hutton admitted that he could obtain financing from at least United Leasing. MPI had negotiated the lease terms with United Leasing on Hutton’s behalf. Hutton refused to accept the United Leasing proposal in part because the monthly lease cost was almost $200 more than the monthly cost set forth in MPI’s franchise circular. Aside from the United Leasing proposal, Hutton explored only two other avenues of financing. He first requested that MPI submit a lease application to Trinity Leasing despite his knowledge that he did not qualify for such financing under Trinity’s leasing guidelines. Trinity denied his application. Hutton then submitted an application to Society Bank of Dayton which was prepared with Dennis Hanley’s assistance. The application was rejected due to insufficient collateral.

The trial court apparently concluded that these efforts were sufficient to obviate any genuine issue of fact as to whether Hutton was able to locate financing. While we agree with the court’s observation that Hutton “[was] not required to search endlessly when it seem[ed] further efforts [would] meet with similar results,” we do not agree these efforts conclusively established that Hutton exerted a good faith effort to secure financing. Indeed, we identify two issues of material fact based on this uncontroverted evidence. The issues are whether contacting only one bank and only one other leasing institution constituted a reasonable effort to secure suitable financing, and whether Hutton could claim he made a reasonable attempt to secure suitable leasing with United Leasing and Trinity Leasing when MPI, not Hutton, arranged the United Leasing lease, and when Hutton knew before submitting an application to Trinity that he did not meet Trinity’s leasing criteria.

Moreover, the record also contains critical, disputed evidence which precluded summary judgment. The affidavit of MPI’s financial director, Dennis Hanley, contained evidence that Hutton told Hanley he could, in fact, have obtained the necessary financing from his father-in-law, Charles Allport. Hanley’s affidavit also contained evidence that Allport had repeatedly represented himself to Hanley as one of Hutton’s franchise investors. In his response to MPI’s interrogatories, Hutton steadfastly denied any such arrangement existed. This conflicting evidence, without more, was sufficient to create a genuine issue of fact as to Hutton’s ability to obtain satisfactory financing and to thus render summary judgment inappropriate.

The assignment of error is sustained.

The judgment of the trial court will be reversed. The matter will be remanded for further proceedings consistent with this opinion.

Judgment accordingly.

*188Brogan, J., concurs.

Fain, P.J., concurs in the judgment.

Fain, Presiding Judge,

concurring in the judgment.

Although I concur in the judgment of the court, I would apply a subjective standard in determining whether reasonable minds could reach different conclusions as to whether Hutton was unable to obtain financing “suitable to him.”

I find Judge Wolffs analysis of this issue to be excellent, but I would reach a different conclusion. There are many variables to consider in determining whether financing is “suitable.” Besides the duration of the loan and the interest rate, there are (i) the scope and extent of the definitions of acts of default; (ii) the consequences of acts of default, which can range from modest to punitive; and (iii) the extent of personal collateral required for the loan. In my view, the many and diverse implications of the terms of possible financing packages makes this case similar to Mattei v. Hopper (1958), 51 Cal.2d 119, 330 P.2d 625, in which it was held to be impractical to apply an objective test for a contracting party’s satisfaction.

Although I would employ a subjective test, I nevertheless agree that reasonable minds could reach different conclusions whether “suitable” financing was available to Hutton. There was some evidence that Hutton had refused MPI’s help in seeking possible sources of financing, and there was some evidence, albeit controverted, that Hutton’s father-in-law was a possible source of financing. In my view, reasonable minds could have reached different conclusions whether Hutton acted in good faith in declaring that no suitable financing was available to him. Therefore, I join in the judgment of this court reversing the summary judgment rendered in Hutton’s favor, and remanding this cause to the trial court for further proceedings.