What is the Parol Evidence Rule and how do I apply it on an essay?

Question

The Parol Evidence Rule applies when the parties have executed a written contract and one party seeks to introduce evidence of an oral statement that relates to the contract terms. The Parol Evidence Rule prevents the introduction of prior or contemporaneous oral negotiations and agreements that contradict, modify, or vary the contractual terms when the written contract is intended to be a complete and final expression of the parties' agreement. Thus, it is not likely that a court will honor any additional verbal agreements if the parties intended the written contract to be the final expression of their full agreement unless an exception applies as follows:

1. Errors due to mistake, fraud, duress, or illegality
2. Ambiguity of parties’ intent
3. Prior, valid agreement not described correctly in the written contract
4. Related agreement that does not contradict or modify the contract
5. Condition that had to occur before the contract performance was due
6. Subsequent modification to the terms of the contract

Analysis of this issue should be done in 4 parts:

(1) Was there a valid written contract?

(2) Did the parties intend it be the final expression of their agreement (typically via a merger clause)?

(3) Are there oral statement(s) made that might change the terms of the contract?

and

(4) Does an exception apply?

Answer 1

March 28, 2020 (Saturday)

Re: The Parole Evidence Rule

(1) The title of the Rule is very misleading. The Rule applies to any pre-contract "communications" (not just verbal communications). Moreover, it is not a Rule of Evidence but a doctrine of contract law (related to the contract doctrine of "integration").

(2) The Rule only applies where pre-contract communications are proffered to "vary" [change] the terms of a written contract. Pre-contract communications presented to explain ambiguous or highly technical terms in a written contract are not prohibited.

(3) The Parole Evidence Rule applies even if there is no integration (merger) clause.

(4) Post-Contract communications and actions (such as "course of conduct") can be used for any relevant and material purpose, including attempts to vary the terms of a contract.

(5) There are strong public policies supporting the Rule: without it a party that wished his/her contract were different ("buyers' remorse") could simply lie about the communications conducted before the contract was signed. Moreover, the Rule aids the courts in meeting their paramount duty to enforce contracts- or else commerce might wither on the vine.