Law School

Contracts Lecture Twelve: The Parol Evidence Rule


Listen Later

These sources collectively illuminate the Parol Evidence Rule, a fundamental principle in contract law that generally restricts the use of extrinsic evidence—such as prior oral agreements or discussions—to contradict or modify the terms of a final written contract. They explain that the rule aims to promote finality, certainty, and reliability in agreements, emphasizing the importance of integration, which refers to whether the written contract is considered the complete and exclusive expression of the parties' intent. While highlighting the rule's common law origins and its more liberal application under the Uniform Commercial Code (UCC) for goods, the texts also detail crucial exceptions allowing extrinsic evidence for purposes like proving contract defenses, clarifying ambiguities, establishing conditions precedent, or demonstrating subsequent modifications or collateral agreements. Ultimately, understanding this rule is crucial for drafting, interpreting, and litigating contracts, as it dictates what external information a court will consider when determining contractual obligations.

The primary purpose of the Parol Evidence Rule is to ensure finality, certainty, and reliability in written contracts. It limits the admissibility of extrinsic evidence (oral or written statements made prior to or contemporaneous with the contract) that would contradict or modify the terms of a written agreement intended by the parties as a final expression.

"Parol evidence" refers to oral or written statements made before or at the time the written contract is executed. "Subsequent modifications," however, are agreements made after the written contract is executed, and the Parol Evidence Rule does not bar their admission.

A "partially integrated" agreement is one where the writing is final as to some terms but not the entire agreement. A "completely integrated" agreement, conversely, is intended as the exclusive and complete expression of all terms, meaning it is the sole source of the contract's terms.

A merger clause is a provision stating the contract is the complete and exclusive agreement. It serves as strong evidence of complete integration, often dispositive under the "four corners" approach, but in modern "contextual" jurisdictions, it may only create a rebuttable presumption and is not always conclusive.

Under the "four corners rule," courts determine if a contract is integrated by examining only the language within the written document itself. They do not look to any external evidence to ascertain the parties' intent regarding the writing's finality or completeness.

Under the UCC, for contracts involving the sale of goods, terms can be explained or supplemented by evidence of "trade usage" or "course of dealing," even if the writing is unambiguous and fully integrated. This approach is more liberal than common law, recognizing the importance of commercial context.

Parol evidence would be admissible to prove a condition precedent if, for example, parties orally agreed that a written contract for a property sale would only become binding if a specific zoning permit was approved, even if this condition wasn't in the written contract. This evidence shows the contract's effectiveness was conditional.

Evidence of fraud is an exception to the Parol Evidence Rule because the rule is intended to uphold valid contracts, not to shield fraudulent behavior. Allowing evidence of fraud permits courts to determine if the agreement itself is void or voidable due to fundamental impropriety.

If a contract is "partially integrated," extrinsic evidence that contradicts the written terms is generally prohibited. However, evidence of consistent additional terms—those that supplement or add to the written terms without negating them—is typically allowed.

For parties, the Parol Evidence Rule emphasizes the critical importance of careful drafting to ensure all essential terms are included in the written document. It also highlights the need for clear integra

...more
View all episodesView all episodes
Download on the App Store

Law SchoolBy The Law School of America

  • 3
  • 3
  • 3
  • 3
  • 3

3

42 ratings


More shows like Law School

View all
Bloomberg Law by Bloomberg

Bloomberg Law

374 Listeners

Above the Law - Thinking Like a Lawyer by Legal Talk Network

Above the Law - Thinking Like a Lawyer

481 Listeners

Thinking LSAT by Nathan Fox and Ben Olson

Thinking LSAT

885 Listeners

The Law School Toolbox Podcast: Tools for Law Students from 1L to the Bar Exam, and Beyond by Alison Monahan and Lee Burgess - Law School Toolbox, LLC

The Law School Toolbox Podcast: Tools for Law Students from 1L to the Bar Exam, and Beyond

507 Listeners

Up First from NPR by NPR

Up First from NPR

56,375 Listeners

Law to Fact by Professor Leslie Garfield Tenzer

Law to Fact

194 Listeners

The Bar Exam Toolbox Podcast: Pass the Bar Exam with Less Stress by Bar Exam Toolbox

The Bar Exam Toolbox Podcast: Pass the Bar Exam with Less Stress

435 Listeners

Fiction - Comedy Fiction by The Sunset Explorers

Fiction - Comedy Fiction

6,446 Listeners

Civil Procedure by Prof. Thomas Main

Civil Procedure

75 Listeners

The Law of the United States by Mark Shope

The Law of the United States

2 Listeners

Basic Contract Law for Students by The Contract Tutor

Basic Contract Law for Students

22 Listeners

Law School in Plain English: Torts & Criminal Law. by Jeff Brown

Law School in Plain English: Torts & Criminal Law.

9 Listeners

Law Schoolers by Law Schoolers

Law Schoolers

9 Listeners

American Law Cafe by Pre-Law Productions

American Law Cafe

10 Listeners

Study for the Bar in Your Car by Angela Rutledge, LLM, LLB

Study for the Bar in Your Car

5 Listeners