parol evidence rule - contracts

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parol evidence rule - contracts

Postby myung76 » Tue Dec 04, 2012 5:15 pm


would someone be able to explain to me the very basics of this rule, as if we approach it in an exam?

would be much appreciated

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Re: parol evidence rule - contracts

Postby musicfor18 » Tue Dec 04, 2012 5:55 pm

I'll start, with the caveat that my professor spent painfully little time on the parol evidence rule in class, but expects us to know it in full for the exam. I hope others will point out anything that might be incorrect.

First of all, the Parol Evidence Rule applies only if there is a written contract.

1) Parol Evidence Rule does not apply in the following situations:
- if there is no written contract
- if the evidence in question involves an agreement made subsequent to the written contract (this is never barred)
- if the evidence is intended only to explain or interpret terms in the writing
- if the evidence is intended to prove fraud, illegality, duress, mistake, lack of consideration, or other factors that make a contract voidable
- if the evidence is of a prior oral or written agreement (or simultaneous oral agreement) that is a collateral agreement and has its own consideration
- if the parties didn't intend the written contract to be final expression of their agreement (an integration)

2) Evidence contained in a side writing that was signed contemporaneously with the main written contract is treated as if it were part of the main written contract.

3) If a writing is partially integrated, parol evidence can't be used to modify/change/contradict the writing, but it CAN be used to supplement the writing (missing terms).

4) If a writing is completely integrated, parol evidence can't be used either to modify/change/contradict or to supplement the writing.

5) The judge (not jury) determines whether the integration is partial or complete, whether the writing is an integration at all, and whether a given piece of evidence would contradict, supplement, or merely interpret the writing
- evidence of prior and contemporaneous negotiations and agreements is admissible to show whether the writing is integrated at all, and whether it's a partial or complete integration

6) If a writing reasonably appears on its face to be complete and specific, there is a presumption that it's a complete integration (unless evidence shows otherwise).

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Re: parol evidence rule - contracts

Postby ArmyOfficer » Tue Dec 04, 2012 6:56 pm

Another key is that the first inquiry is: Is that contract term ambiguous?

If the contract term is not ambiguous, and someone tries to admit evidence to explain the contract, the parole evidence rule does not apply and you don't even have to go through with the steps noted above.

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Re: parol evidence rule - contracts

Postby jump_man » Tue Dec 04, 2012 7:08 pm

This is a helpful flowchart:

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Re: parol evidence rule - contracts

Postby SportsFan » Tue Dec 04, 2012 7:35 pm

The PER is that you can't use parol evidence to modify/clarify/whatever any part of an integrated agreement. The way my professor taught the PER was basically based on 4 cases.

First was Thompson v. Libbey which gave the "4 Corners Rule", which was basically that nothing outside the 4 corners of a document could be used to see if it was an integrated agreement or not (so basically, everything was assumed to be an integrated agreement unless it specifically said so). No one uses that rule anymore (but at least for my professor, I'm sure I'll get a point for mentioning it).

Next was Brown v. Oliver which said that you could look at outside evidence to see if the agreement was integrated or not (if the agreement doesn't say so). And if its not integrated, can use outside information to change/interpret parts of the contract which are not contradicted and not addressed.

Later came Pacific Gas, which allowed extraneous information to interpret the contract, not just to explain issues which aren't addressed (this is basically the extreme version of the modern rule), because the court basically said that the written words of a contract aren't what actually matters, its the underlying intent of the parties.

Later was Trident Center, which basically limited the Pacific Gas rule so that we don't look at extraneous information to figure out the meaning of plain language and plain meaning (so the underlying intent of the parties still matters, but not if something is plain and clear).

Anyway, that's how we learned it, so maybe that'll help.

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Re: parol evidence rule - contracts

Postby ClubberLang » Thu Dec 06, 2012 6:27 am

Can't believe people responded.

This is kind of like "can someone explain consideration?" It's not an easy topic or anything but have you tried opening your book or listening in class? Take a stab at it or ask something a bit more specific.

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