HOLDINGS: [1]-The merger by deed doctrine did not preclude admission of extrinsic evidence under Code Civ. Proc., § 1856, subd. (h), concerning a buyer's understanding of a disclosure covenant and warranty as continuing after the close of escrow because the declaration proposed an interpretation of the real estate purchase agreement to which it was reasonably susceptible; [2]-Alternatively, the cause of action for breach of contract already had accrued upon the alleged breach of the disclosure covenant prior to the close of escrow, although damages had not yet been incurred when escrow closed, and thus could not be extinguished by the merger doctrine; [3]-In any event, the collateral terms exception would apply to preclude the application of the merger doctrine because if the alleged breach in fact occurred, equity would treat the disclosure covenant and warranty as collateral promises.

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Outcome

Reversed and remanded.