What Is Parol Evidence Rule in Contract Law

The parol evidence rule is a fundamental principle of contract law that governs the use of oral and written communications that are not part of a written contract. This rule is essential because it helps ensure that parties to a contract are held to the terms and conditions expressed in their written agreement.

According to the parol evidence rule, when parties reduce their agreement to a writing, such as a contract, the writing itself becomes the exclusive evidence of the terms of their agreement. This means that any prior oral or written communications between the parties that contradict, modify, or add to the terms of the written agreement will be inadmissible in court.

In other words, if the parties intended to incorporate their prior oral or written agreements into the final written contract, they would have included them in the written agreement, and any extrinsic evidence of these prior agreements is not admissible in court.

The parol evidence rule applies in situations where a written contract exists, and the parties have made an integrated agreement. An integrated agreement is a written contract intended to be a complete and final expression of all the terms of the agreement.

However, there are some exceptions to the parol evidence rule. One exception is when the written agreement is ambiguous, incomplete, or silent on a particular term or provision. In such cases, the court may allow the parties to present extrinsic evidence to help clarify or supplement the written agreement.

Another exception is when the parties allege fraud, mistake, duress, undue influence, illegality, or unconscionability. In these circumstances, the parties may present extrinsic evidence to show that the written agreement was not a true reflection of their agreement.

In conclusion, the parol evidence rule is a crucial principle of contract law that governs the use of extrinsic evidence to interpret the terms of a written agreement. Although there are some exceptions to this rule, parties to a written contract should strive to include all relevant terms and conditions in their written agreement and avoid any misunderstandings or disputes that may arise from extrinsic evidence. As a professional, it is crucial to understand the parol evidence rule, especially when editing legal content, to ensure that the information is accurate and informative.