Parol Evidence Rule

Question 1

Parole Evidence Rule - Purpose

Answer 1

PER governs the introduction of evidence related to the negotiations of the parties, which lead to execution. This covers oral and documentary evidence prior to or contemporaneous with execution.

Question 2

Parole Evidence Rule - 2 Key Questions

Answer 2

1. What is the purpose for which the evidence is being introduced?
2. Does the evidence relate to a term or K which is integrated?

Question 3

Integration - Fully Integrated Defined

Answer 3

This means that the terms contained within the K are intended to be the final discussion of the parties as to those terms. It does not mean that the parties have specifically excluded any provisions not within the agreement. In other words, this is the final word on THESE terms but there might be others!

Question 4

Integration - Completely Integrated Defined

Answer 4

This means that the parties intend the K to represent a complete and exclusive statement of all terms. Only terms in the K are considered part of the K.

Question 5

Complete v. Full Integration - Who Decides Issue

Answer 5

This is a question for the judge, not the jury.

Question 6

Full Integration? - Two Factors Considered by Judge

Answer 6

1. Thoroughness and specificity of K regarding those terms at issue.
2. Parol and other extrinsic evidence are admissible and must be considered.

Question 7

Complete Integration? - Evidence Considered

Answer 7

1. Merger Clause - expression that agreement is exhaustive. JDX split on whether this is conclusive or persuasive as to complete integration.
2. Courts consider the detail of the terms and the length of the agreement.
3. Parol and Extrinsic evidence may be considered

Question 8

Purpose for which Evidence is Introduced - Three Possibilities

Answer 8

1. To Explain or Interpret the terms.
2. To Supplement the terms.
3. To contradict the terms.

Question 9

Explain or Interpret - Admissibility

Answer 9

In majority of JDX, evidence to explain or interpret is always admissible. In minority, must make threshold showing that term is patently ambiguous before admitting PE.

Question 10

To Supplement - Admissibility

Answer 10

In majority of JDX, PE is admissible unless K is completely integrated.

Question 11

To Supplement in UCC - Admissibility

Answer 11

Usage of trade, course of dealing, and course of performance evidence are admissible in sale of goods cases to supplement terms.

Question 12

To Contradict - Admissibility

Answer 12

PE is admissible unless terms are fully integrated.

Question 13

To Contradict in UCC - Admissibility

Answer 13

Course of dealing or performance evidence may be admissible in sale of goods cases to qualify meaning of an integrated term.

Question 14

Exceptions to PER - PER does not apply in 3 situations

Answer 14

Subsequent Agreements - agreements after execution Collateral Agreements - agreements entirely distinct from one at issue
Attacks on Validity of Agreement - Efforts to prove agreement invalid such as failure of an oral condition, absence of consideration, mistake or duress, fraud, and reformation.

Question 15

Exception to PER - Attacks on Validity - Failure of an Oral Condition

Answer 15

Evidence that the parties orally agreed to a condition precedent to the contract where both parties’ obligations would be discharged is not barred by PER

Question 16

Exception to PER - Attacks on Validity - Absence of Consideration

Answer 16

Evidence that agreement lacks consideration or that there was a false recital is not barred by PER

Question 17

Exception to PER - Attacks on Validity - Mistake or Duress

Answer 17

Evidence that agreement was made by mistake or duress not barred by PER

Question 18

Exception to PER - Attacks on Validity - Fraud

Answer 18

Majority says evidence of fraud not barred. Minority bars such evidence where representations are limited to the four corners of the document.

Question 19

Exception to PER - Attacks on Validity - Reformation

Answer 19

PER does not apply where parties agree but due to mutual mistake or fraud, some provision was omitted, inserted, or incorrectly stated.