What is the Parol Evidence Rule?

Question:

Write an essay on parol evidence rule.
 

The parol evidence rule refers to the rule of the substantive common law that applies in those cases of contract where any party is prevented in any written contract from making the presentation of the evidence that is extrinsic and makes the disclosure of ambiguity. The parol evidence rule also makes the clarification or makes the addition to terms of the contract that is written as a whole. The term parol is derived from the Anglo –French and Anglo-Norman system that means oral. The primary rule of the parol evidence system is that as the parties to the contract reduced the agreement to a genuine agreement that is written, the extrinsic evidence of the agreements in the past or any such terms should never be considered during the interpretation of the written contract. In the simple terms, no party to a contract can make the use of the terms that is made before the written contract to make to make the contradiction of the term that is written. The rule of parol evidence is often confused with the general evidence rule. But in the real terms, it is not the case. In the case of State Rail Authority of New South Wales v Heath Outdoor Pty Ltd (1986) 7 NSWLR 170, NSW Court of Appeal, at 191, the Court held that the rule of parol evidence shall never get the application in cases where is no contract in writing[1].

The rule of parol evidence has its application in cases of the other evidence that are extrinsic. In simpler terms it means that the rule applies in those cases where the written agreement does not create any different contract. in an event if the contract is in writing and makes the exclusion of any term which is integrated then the principles of parol evidence is not applied or excluded generally. But, there exist several exceptions to the general rule[2]. The exceptions include contracts that are integrated partially, the agreements containing the separate consideration than writing, the contracts acting to make the resolution of the ambiguities or those contracts that aim in the establishment of defenses. In this regard, there are several examples that can be taken into consideration. For instance, if John makes an agreement with Cook in writing to make the sale of his car for an amount of dollar two thousand. But there has been an argument that is put forward by Cook that John previously made the promise to Cook that he would sale the car at an amount of thousand dollars. In this instance, the parol evidence rule is applicable. In this example, the rule of parol evidence shall prevent John in making the contradiction of the promised dollar of thousand to an amount of dollar two thousand. In the case of Saleh v Romans [2010] NSWCA 373, the Court held that the equitable estoppel was ahead of the parol evidence rule[3].

The parol evidence rule for becoming effective it has to be stipulated that the contract must be in writing and integrated. In addition to that, the contract must also be in accordance with the judgment of the court be the final agreement in between the parties. An agreement that is final must be either complete or final integration. It is based on the fact that such contract must have an agreement that indicates its finality. In case the contract contains few and all the terms, which are agreed by the parties, then such contract is termed as a contract of partial integration. This means that the contract that is in writing acts as the final agreement only in case of certain terms. On the other side, in case, if the contract that is written contains all the terms and conditions that are agreed between the parties to it, it would be termed as complete integration. In the case of Gilberto v Kenny [1983] 48 CLR 620, the Court permitted the admissibility of the oral evidence. The Court also held that Mrs. Kenny signed the written agreement relating to selling of house on behalf of her husband[4].   

When Does the Parol Evidence Rule Apply?

The difference between the complete and the partial integration is considered as relevant only to that extent to which the evidence is not included in the rule of parol evidence. In a case of both the partial and the complete integration, the evidence that is in contradiction of the contract ibn written is excluded from the parol evidence rule. However, in the case of integration in the partial sense, the terms of the contract that supplements the contract that is written is permissible in the rule of parol evidence.

In case the parties to any contract create an intention to make a complete integration of the terms of the contract, then the parol evidence in the scope of the agreement is not permitted. In case, the parties to any contract make the intention to make any agreement of partial integration, then the rule of parol evidence cannot make the contradiction of the terms that are integrated. In case the rule of parol evidence is collateral, it regards that the agreement is a different one, and it does not make contradiction of the terms that are integrated[5].

In the small States of the United States like Colorado, Florida and Wisconsin, the rule regarding parol evidence stands as the strong evidence and is always prevented from making the interpretation of the contract. This is regarded as the rule of four corners. The four corners rule leads to the express stipulation of mainly two primary rules. In the first instance, the rule states that any Court shall never make the allowance of the rule of parol evidence to operate in case if the parties to the contract make the intention to make a complete and full integrated agreement. In the second instance, any Court shall take the help of the rule of parol evidence cases where the terms of any contract are totally ambiguous. The primary policy of the Court is to make the prevention of the parties from lying and protect any party to a contract gainst the act of double veracity. The other primary policy of Court to use the rule of parol evidence is to make the parties contract to rely on the contracts that are written and also for the efficiency of a judicial system. In most of the jurisdictions, there are several exceptions to the rule of parole evidence[6]. 

Making of Contract- Contract is regarded as when two parties’ makes an agreement and when law enforces it. The final and complete form of a document will be recognized as a written document. Contract is not needed to be in a written form, but when it is in a written form, it must have to be identified and represented by both the parties. The contract when it is in written form it has to be enforceable by law. If in case any party fails to fulfill the terms and conditions of the contract then the other part can sue or file a suit for performance or noncompliance. In the eyes of the law, this kind of law suit is regarded as “Breach of contract”. In the Court when the suit will be considered by the judge, the judge will take into consideration the written contract. Contract acts as only evidence in the Court in the matter of determining that the parties in a contract have fulfilled all the terms and conditions of the agreement. This is taken into consideration by the court because any other extra type of evidence will create complicacy in the proceedings of the court in the enforcement of written contract[7].

Exceptions to the Parol Evidence Rule

Parole evidence rule- The rules regarding parole evidence is applicable in matters of written contract. Parole evidence is a pertaining agreement which is not included in written form of contract. The Court doesn’t entertain extra evidence because there is a burden of Court in determining the intentions and rights of the parties. Thus, Court entertains written Contract because it best determines the rights and intentions of the parties[8].

Parole evidence is dealt with deeds, will, and other kinds of writings which are referred as extraneous evidence which is applicable in both oral as well as written agreements which have written documents that are relevant. The parole evidence rule is regarded as the principle which helps in preserving the integrity of written documents or agreements that prohibit the parties from the alteration of the written documents. This also helps in using the contemporaneous or oral or written form of declarations which is not at all referred in the document[9].

The contract in the eyes of laws has different meanings which are commonly known as discussion, proposal and negotiation before they are finally included in the original contract. When the parties of contract by negotiation put their agreements in written version and acknowledges the statement in complete an in a form of exclusive declaration of their agreement that they have in the form of integrated contract. The rules regarding parol evidence apply to applicable to integrated contracts and supports that the parties in writing put their agreement and all other kinds of writing including oral and written agreements which merge into writing. Courts also do not grant permission to modify, amend, alter or change the integrated Contract in any of the ways contemporaneous or prior agreement which is contradictory regarding the terms of all kinds of written contracts.

The parol evidence applies to written contracts to safeguard the terms and conditions of the Contract. The courts can assume that parol evidence rules regarding contract contain all kinds of provisions and terms which are specially intended by the parties and also helps in lacking those provisions that the parties do not want.

In written integrated contract the rule of parol evidence is not applicable. It can be taken for example that in case the typographical or clerical is incorrectly placed in the agreement then it doesn’t represent the true agreement between the parties. The court has the discretionary powers not to apply parol evidence rule as contradictory evidence, which includes mistake, under duress, undue influence or fraud. Finally, according to parol evidence, it can be stated that this evidence rule will not be applicable in preventing the evidence which describes the separate existence of the agreement between the parties. The law of sales includes numerous contracts which are written or oral for which the rules of parol evidence are applicable. The court in certain circumstances considers supplementary consistence evidence which doesn’t include written agreements as long as it doesn’t contradict the terms and conditions of the original agreement[10]. 

Masterson v. Sine, 68 cals. 2d 222, 436 P.2d 561, 65 Cal. Rptr. 545 (1968)

Partial vs. Complete Integration

Facts: Dallas and Rebecca Masterson as a tenant owned a ranch which was conveyed by them as a grand deed. Dallas sister and her husband repurchased the ranch in exchange for ten years in change which was to be paid by shine[11].

In the trial, it was held by the Court that determination of parol evidence was not included in admission of the extrinsic fact that the parties wanted the property which was kept in the family of Masterson and thus opinion was personal to the grantors who couldn’t exercise the trustee in bankruptcy. The court in judgment held for P and D who appealed on the grounds of uncertain enforcement extrinsic evidence is meaningless and thus cannot be admitted[12].

Gordon v. Macgregor, (1909) 8 CLR 316, High Court of Australia,

In this case the fact is that Gordon was not successful in delivering the specification Macgregor for which claimed damages. The agreement was that the delivery was to commence after three months from the date of Contract and that the minimum girth of the Goods was 6 feet[13].

The trial judge found that the delivery shouldn’t have committed for three months period and also stated by trial judge that there was a mere oral agreement regarding the matter of minimum girth of logs[14].

In the judgment of full court Macgregor was successful; though it was considered there was some basic points regarding the judgment of trial judge had existence. It was found that there was existence of alleged oral terms. But the Judges on appeal found that there was proper evidence to support the findings of trial judge as there was an oral term as girth[15]. 

• Customs or usage- This means that the languages used as instrument in contract must have particular meaning especially in trade region and industry as admissible evidence. Hutton v Warren[16].
• Verbal- This means that agreement and also detailed in case of contract until and outside the occurrence of event. Pym v Campbell[17].
• Incomplete or Written Contract- When the contact is in full written form and without missing of any terms in which the court allows verbal evidence. Van Den Esschert v Chappell
• Ambiguous terms- Extrinsic evidence are applicable in contract in order to resolve ambiguity in any contract. White v Australia and New Zealand Theaters ltd.
• Mistake- If there was clear wrong or there was mistake of the parties was recorded in document[18].
• Identify of the correct parties- verbal evidence is applicable in the ambiguity in order to identify the parties in agreement. Akot Pty Ltd v. Rathmines investments Pty Ltd. 

Reference List

Abrams, Laura S. “Juvenile justice at a crossroads: Science, evidence, and twenty-first century reform.” Social Service Review 87.4 (2013): 725-752.

Allen, Ronald J., et al. “Reforming the Law of Evidence of Tanzania (Part Two): Conceptual Overview and Practical Steps.” BU Int’l LJ 32 (2014): 1.

Burrell, William D., and Edward E. Rhine. “Implementing evidence-based practices in community corrections: A review essay.” Justice Research and Policy 15.1 (2013): 143-157.

Cornish, Trent, and Jay Whetzel. “Location Monitoring for Low-Risk Inmates-A Cost Effective and Evidence-Based Reentry Strategy.” Fed. Probation 78 (2014): 19.

Couzens, J. Richard. “Realignment and Evidence-Based Practice: A New Era in Sentencing California Felonies.” Federal Sentencing Reporter 25.4 (2013): 217-219.

Dagan, Netanel. “Looking Beyond Risk in Paroling Denying Prisoners A Response to Assy and Menashe’s “The Catch-22 in Israel’s Parole Law”.”Criminal justice and behavior (2015): 0093854815589324.

Emerson, Robert W. “Franchising and the Parol Evidence Rule.” American Business Law Journal 50.3 (2013): 659-728.

Epstein, David G., Timothy Archer, and Shalayne Davis. “Extrinsic Evidence, Parol Evidence, and the Parol Evidence Rule: a Call for Courts to Use the Reasoning of the Restatements Rather than the Rhetoric of Common Law.” NML Rev. 44 (2014): 49.

Hall, Maggie, and Kate Rossmanith. “Imposed Stories: Prisoner Self-narratives in the Criminal Justice System in New South Wales, Australia.”International Journal for Crime, Justice & Social Democracy 5.1 (2016).

Ingram, Jefferson L. Criminal evidence. Routledge, 2014.

Lipsey, Mark W., and James C. Howell. “A broader view of evidenceâ€Âbased programs reveals more options for state juvenile justice systems.”Criminology & Public Policy 11.3 (2012): 515-523.

How Courts Interpret the Parol Evidence Rule

Lynch, Michael. Themes of Parole as Presented in Bill C-10: Contributing to the Conservative Government’s’ Tough on Crime’Approach to the Criminal Justice System?. Diss. Université d’Ottawa/University of Ottawa, 2015.

Ong, Burton. “Book Review: International Handbook on Unfair Competition by Frauke Henning-Bodewig.” Singapore Journal of Legal Studies (2013): 478.

Ostendorf, Patrick. “The exclusionary rule of English law and its proper characterisation in the conflict of laws–is it a rule of evidence or contract interpretation?.” Journal of Private International Law 11.1 (2015): 163-183.

Scott, Robert E. “Text versus Context: The Failure of the Unitary Law of Contract Interpretation.” Francis Buckley, The American Illness: Essays on the Rule of Law (2013): 325-326.

Tonry, Michael. “Evidence, ideology, and politics in the making of American criminal justice policy.” Crime and Justice 42.1 (2013): 1-18.

Tzeng, Shuping. “Applying DEMATEL to investigate the relationship between factors affecting parole boards’ decision-making in Taiwan.” The Prison Journal (2013): 0032885513512096.

Welsh, Wayne N., et al. “Effects of an Organizational Linkage Intervention on Inter-Organizational Service Coordination Between Probation/Parole Agencies and Community Treatment Providers.” Administration and Policy in Mental Health and Mental Health Services Research 43.1 (2016): 105-121.

[1] Abrams, Laura S. “Juvenile justice at a crossroads: Science, evidence, and twenty-first century reform.” Social Service Review 87.4 (2013): 725-752.

[2] Welsh, Wayne N., et al. “Effects of an Organizational Linkage Intervention on Inter-Organizational Service Coordination Between Probation/Parole Agencies and Community Treatment Providers.” Administration and Policy in Mental Health and Mental Health Services Research 43.1 (2016): 105-121.

[3] Allen, Ronald J., et al. “Reforming the Law of Evidence of Tanzania (Part Two): Conceptual Overview and Practical Steps.” BU Int’l LJ 32 (2014): 1.

[4] Burrell, William D., and Edward E. Rhine. “Implementing evidence-based practices in community corrections: A review essay.” Justice Research and Policy 15.1 (2013): 143-157.

[5] Cornish, Trent, and Jay Whetzel. “Location Monitoring for Low-Risk Inmates-A Cost Effective and Evidence-Based Reentry Strategy.” Fed. Probation 78 (2014): 19.

[6] Couzens, J. Richard. “Realignment and Evidence-Based Practice: A New Era in Sentencing California Felonies.” Federal Sentencing Reporter 25.4 (2013): 217-219.

[7] Dagan, Netanel. “Looking Beyond Risk in Paroling Denying Prisoners A Response to Assy and Menashe’s “The Catch-22 in Israel’s Parole Law”.”Criminal justice and behavior (2015): 0093854815589324.

[8] Emerson, Robert W. “Franchising and the Parol Evidence Rule.” American Business Law Journal 50.3 (2013): 659-728.

[9] Epstein, David G., Timothy Archer, and Shalayne Davis. “Extrinsic Evidence, Parol Evidence, and the Parol Evidence Rule: a Call for Courts to Use the Reasoning of the Restatements Rather than the Rhetoric of Common Law.” NML Rev. 44 (2014): 49.

[10] Hall, Maggie, and Kate Rossmanith. “Imposed Stories: Prisoner Self-narratives in the Criminal Justice System in New South Wales, Australia.”International Journal for Crime, Justice & Social Democracy 5.1 (2016).

[11] Ingram, Jefferson L. Criminal evidence. Routledge, 2014.

[12] Lipsey, Mark W., and James C. Howell. “A broader view of evidenceâ€Âbased programs reveals more options for state juvenile justice systems.”Criminology & Public Policy 11.3 (2012): 515-523.

[13] Lynch, Michael. Themes of Parole as Presented in Bill C-10: Contributing to the Conservative Government’s’ Tough on Crime’Approach to the Criminal Justice System?. Diss. Université d’Ottawa/University of Ottawa, 2015.

[14] Ong, Burton. “Book Review: International Handbook on Unfair Competition by Frauke Henning-Bodewig.” Singapore Journal of Legal Studies (2013): 478.

[15] Ostendorf, Patrick. “The exclusionary rule of English law and its proper characterisation in the conflict of laws–is it a rule of evidence or contract interpretation?.” Journal of Private International Law 11.1 (2015): 163-183.cott, Robert E. “Text versus Context: The Failure of the Unitary Law of Contract Interpretation.” Francis Buckley, The American Illness: Essays on the Rule of Law (2013): 325-326.