## Facts

- A lender and a real estate developer discussed financing for purchase and redevelopment of a downtown Milwaukee office building.
- The lender issued an earlier commitment letter describing a two-phase financing arrangement.
- The parties later executed a written Term Credit Agreement (TCA) under which the lender funded a $2.5 million term loan to acquire the building.
- The TCA contained an unambiguous merger (integration) clause stating it was the parties’ complete agreement.
- After funding the $2.5 million loan, the lender declined to provide additional redevelopment financing (about $6.5 million).
- The developer asserted the TCA was only the first phase and relied on the commitment letter and the lender’s internal credit memoranda to claim a contractual obligation for the additional financing.

## Issues

1. Whether the TCA was an unambiguous, fully integrated agreement whose merger clause barred evidence of prior agreements, including the commitment letter.
2. Whether the TCA was ambiguous such that extrinsic evidence could be admitted to show the parties intended a two-phase financing obligation.
3. Whether the lender was entitled to summary judgment declaring no obligation to provide financing beyond the TCA’s $2.5 million loan.

## Decision

- The Wisconsin Supreme Court held the TCA was unambiguous and fully integrated.
- The merger clause barred the developer from introducing the commitment letter and other extrinsic evidence to add to or vary the TCA.
- The lender fully performed its obligations under the TCA by funding the $2.5 million loan and had no contractual duty to provide additional financing.
- Summary judgment should have been granted to the lender; the case should not have proceeded to a jury trial.
- The court affirmed the court of appeals’ decision reversing the circuit court’s denial of summary judgment.

## Legal Principles

- A clear merger clause establishes that the written contract is the complete and final expression of the parties’ agreement.
- When a contract is unambiguous and fully integrated, the parol evidence rule excludes prior or contemporaneous agreements offered to add to, vary, or contradict the written terms.
- Contract ambiguity is determined from the contract’s language; extrinsic evidence cannot be used to create ambiguity.
- In commercial lending, a later integrated loan agreement can supersede earlier commitment materials, limiting obligations to those stated in the executed agreement.

## Conclusion

The court enforced the TCA’s unambiguous merger clause and applied the parol evidence rule to exclude the earlier commitment letter and related documents, holding the lender had no obligation to fund additional redevelopment financing beyond the $2.5 million loan and was entitled to summary judgment.


Town Bank v. City Real Estate Dev., LLC, 793 N.W.2d 476 (Wis. 2010)