Parol Evidence

Question 1

What facts trigger the parol evidence rule?

Answer 1

1. Two parties enter into a contract, and there is a writing that is evidence of the contract.
2. One party asserts that the writing (and only the writing) contains all of the terms of their agreement.
3. The other party asserts that there was an oral agreement (or some other writing) that reflects some of the terms of their agreement.

Question 2

Can parol evidence ever contradict the written word?

Answer 2

No

Question 3

What is the analytic framework for parol evidence?

Answer 3

1. Determine Integration
   a. Is the writing a final integration (i.e. agreed and signed)?
   b. If so, is it a partial or total integration?
2. Determine Admissibility of Evidence
   a. Is the evidence contradictory or a consistent additional term?
   i. If contradictory, then never admissible
   ii. If consistent, admissible
3. Consider Exceptions
   a. Interpretative Evidence
   b. Subsequent Agreements
   c. Evidence of Fraud, etc.
   d. Collateral agreements
   e. Oral condition precedent

Question 4

What is the jurisdictional split in parol evidence?

Answer 4

Classic jurisdiction and modern jurisdiction

Question 5

What is the order of operations for determining the terms of a contract?

Answer 5

1. Parol Evidence
2. Interpreting Ambiguous Points
3. Implied Terms

Question 6

What is the Parol Evidence Rule

Answer 6

When the parties to a contract have expressed their agreement in a writing that they intend to be a final and complete integration of their agreement, then evidence of prior or contemporaneous agreements that supplement or contradict the writing is inadmissible.

If the writing is only a partial integration of the agreement, then the writing cannot be contradicted but can be supplemented by evidence of consistent additional terms.

Question 7

Can parol evidence be of agreements made after formation?

Answer 7

No, parol evidence is only for contemporaneous or prior agreements prior to formation.

Question 8

How do you determine integration of a contract?

Answer 8

Two steps: (1) is the writing a final integration (i.e. agreed and signed; and (2) if so, is it partially or totally integrated?

Question 9

What kind of parol evidence is admissible?

Answer 9

Evidence consistent with the written word.

Question 10

What are the five exceptions to the parol evidence rule? (i.e. is always admissible)

Answer 10

a. Interpretative Evidence
b. Subsequent Agreements
c. Evidence of Fraud, etc.
d. Collateral agreements
e. Oral condition precedent

Question 11

How does a classic jurisdiction determine the integration of a contract?

Answer 11

There must be ambiguous language within the 4 corners of the contract without resorting to outside evidence. A merger clause is dispositive.

Question 12

Is a merger clause dispositive for determining admissibility of parol evidence in a modern jurisdiction?

Answer 12

No, but it is weighed.

Question 13

How is the integration of a contract determined in a modern jurisdiction?

Answer 13

Outside evidence may be considered to determine intent of parties as to integration even if there is no ambiguity on the face of the writing. Considers all of the circumstances, including language, conduct, and presence of merger clause.

Question 14

What are seven examples of modern rule facts?

Answer 14

1. Merger clause.
2. The amount of detail in the writing.
3. The nature of the writing (type of contract).
4. The formalities observed in drafting and executing the agreement.
5. Type of transaction and business practices.
6. Relationship of parties and past dealings.
7. The nature of the parol evidence. If it is an essential term, you probably would not have left it out on purpose.

Question 15

If a contract is totally integrated, can consistent additional terms be found in parol evidence?

Answer 15

No

Question 16

If found to be partially integrated, can consistent additional terms be found in parol evidence?

Answer 16

Yes