PAROL EVIDENCE RULE Flashcards
WHEN IS THE PAROL EVIDENCE RULE INAPPLICABLE?
- AMBIGUITY AND INTERPRETATION
EVIDENCE MAY BE ADMITTED FOR THE PURPOSE OF INTERPRETING OR CLARIFYING AN AMBIGUITY IN THE AGREEMENT. THIS CAN INCLUDE EVIDENCE OF TRADE USAGE OR EVEN LOCAL CUSTOM TO SHOW THAT A PARTICULAR WORD OR PHRASE HAD A PARTICULAR MEANING.
a. PLAIN MEANING RULE
THIS RULE PROVIDES THAT THE OBJECTIVE DEFINITIONS OF CONTRACT TERMS CONTROL THE MEANING OF THE CONTRACT, REGARDLES OF WHETHER THE MEANING CORRESPONDS WITH THE ACTUAL INTENTOF THE PARTIES.
SOMETIMES COURTS WILL GO OUTSIDE THE DOCUMENT TO CLARIFY THE ORDINARY MEANING OF TERMS THAT ARE AMBIGUOUS OR OVERLY VAGUE.
b. CONTEXT RULE
SOME STATES PERMIT COURTS TO SUE A CONTEXTUAL APPROACH TO CONTRACT INTERPRETATION. UNDER THE CONTEXT RULE, JUDGES DETERMINE THE CONTRACT’S MEANING BY CONSIDERING ALL EVIDENCE OF THE FACTS AND CIRCUMSTANCES RELATED TO THE TRANSACTION.
GOAL IS TO EFFECTUATE THE PARTIES’ ACTUAL CONTRACT OBJECTIVES AND PURPOSES.
HOW DOES FL DIFFER ON THESE RULES?
IN FL, A PHRASE IS CONSIDERED AMBIGUOUS WHEN IT MAY BE FAIRLY UNDERSTOOD MORE THAN ONE WAY. FOR EXTRINSIC EVIDENCE TO BE ADMISSIBLE, THE AMBIGUITY MUST EXIST ON THE FACE OF THE CONTRACT AND MUST BE LATENT (i.e. THE AMBIGUITY OF A PHRASE MUST REQUIRE EXTRINSIC EVIDENCE TO INTERPRET ITS MEANING.
