When the Ann (the buyer) and Billie (the seller) entered into a contract for the sale of computers, they included an integration clause that stated that the written agreement represented the entirety of the agreement. Later, there arose a contract dispute over the quantity of computers to be shipped to Ann. Ann sued Billie in court and sought to introduce evidence that there was a prior oral agreement that Billie would send her ten computers instead of the five that were written in the contract. The judge ruled that such evidence of an oral agreement was inadmissible under the parol evidence rule, because there was an integration clause.
parol evidence rule
Definition
A rule that governs the extent to which parties to a case may introduce into court evidence of a prior or contemporaneous agreement in order to modify, explain, or supplement the contract at issue. The rule states that where the parties to a contract intended for their written agreement to be the full and final expression of their bargain (i.e., the writing is an integration), other written or oral agreements that were made prior to or simultaneous with the writing are inadmissible for the purpose of changing the terms of the original agreement.
Definition from Nolo’s Plain-English Law Dictionary
If there is a written contract, the terms of the contract cannot be altered by evidence of oral (parol) agreements purporting to change, explain, or contradict the written document. (See also: extrinsic evidence)
Definition provided by Nolo’s Plain-English Law Dictionary.
August 19, 2010, 5:21 pm
“The parol evidence rule, briefly stated, requires that in the absence of fraud, duress, or mutual mistake, all extrinsic evidence must be excluded if the parties have reduced their agreement to an integrated writing. Under this rule, all prior and contemporaneous negotiations or understandings of the contract are merged, once that contract is reduced in writing. Williston on Contracts, Third Edition § 631.
“As this case illustrates, application of the rule can work to create harsh results. However, the policies behind the rule compel its consistent, uniform application. Commercial stability requires that parties to a contract may rely upon its express terms without worrying that the law will allow the other party to change the terms of the agreement at a later date.” J. McDonough, Baker v. Bailey, 240 Mont. 139 (Mo. 1989)
