Parol Evidence Rule

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Parol Evidence Rule by Mind Map: Parol Evidence Rule

1. Designed as a rule of exclusion.

1.1. If applicable, the evidence is EXCLUDED. If not, then the evidence is included.

2. Provides situations in which evidence of an agreement made outside the writing should be included into the contract. (what will be admitted)

2.1. Evidence includes:

2.1.1. to interpret

2.1.2. Of integration

2.1.3. to show formation of a condition

2.1.4. To show matters of avoidance

2.2. Statements or agreements subsequent to the 'final' written agreement

3. Assumptions of the rule:

3.1. A written contract exists between the parties

3.2. A problem has arisen with the contract

3.2.1. Ie. is the writing alone the contract or is the writing + something else the contract.

3.3. Basic issue: would the terms outside of the written contract be considered part of the contract even though not a part of the overall writing.

4. Applying the rule:

4.1. Is the contract in writing?

4.2. Is it a final statement (Integrated)?

4.2.1. Integrated: Writing is intended to e the final statement of the agreement

4.3. Do any of the 5 exceptions apply to the writing/transaction

4.3.1. Evidence regarding whether or not the writing is integrated

4.3.2. Statements or agreements made subsequent to the final agreement

4.3.3. Evidence to interpret the writing

4.3.4. Evidence to show that a condition to formation exists

4.3.5. Evidence to show matters of avoidance exist.

4.4. Is the the final writing a total or partial integration?

4.4.1. Total-> every term of the contract is in the writing Evidence cannot contradict nor supplement the writing

4.4.2. Partial-> Every term is not in the writing Evidence Cannot contradict, but can supplement the writing.

5. Test to determine if the rule applies

5.1. Williston's Test (Common Law)

5.1.1. Is there a merger clause in the contract? Yes Total integration no Is the term one that would naturallly be included in the writing

5.2. UCC 2-202

5.2.1. Assumes partial integration may always explain or supplement w/ course of dealing, course of performance or usage of trade May also explain with other consistent terms unless the judge finds the writing to be complete and exclusive

5.2.2. Would the parties have certainly included the term? Yes Total Integration No Partial integration

5.3. Collateral Contract Concept

5.3.1. Is the agreement in form, collateral to the contract in question?

5.3.2. Does the agreement contradict an express or implied provision of the writing?

5.3.3. Would it be one the parties would have ordinarily included in the contract

6. Where a writing exists, but one party claims the agreement should include prior or contemporaneous understandings that either add or contradict the writing