§2-202 - The Parol Evidence Rule
• The parol evidence rule is a tool that is used to determine what evidence is admissible in ascertaining the terms of a contract and their meaning when the parties’ agreement is in a record.
• The parol evidence rule is based upon the idea that if the evidence of an agreement is in a record, that record is a better indication of the parties’ actual agreement in some circumstances.
• Revised §2-202 only applies when one of the two fact situations is present. The first situation is when there are “terms with respect to which the confirmatory records of the parties agree.” The second situation is when “terms…which are otherwise set forth in a record intended by the parties as a final expression of their agreement with respect to such terms as are included therein.”
• General Rule: Parol Evidence is NOT allowed if:
o There is a fully integrated contract (final and complete expression of agreement);
o The evidence is of an earlier written or oral agreement or a contemporaneous oral agreement within the scope of the contract; and
o The evidence attempts to vary. Add, or contradict the terms of the contract.
• General Rule: Parol evidence MAY be admissible if:
o Offered to show lack of consideration, fraud, duress, or mistake;
o Offered to show a condition precedent to effectiveness of the final contract;
o Offered to explain or interpret terms of the contract;
o It concerns a modification of the contract (later agreement)
o It concerns a “naturally omitted” term; or
o Separate consideration was given for the parol agreement.
• Restatement § 214 – Exceptions to the parol evidence rule
o (c) the meaning of the writing
Exception to the exception – plain mean rule – of the meaning of the writing is plain, then parol evidence not admitted.
• Parol evidence analysis
1. Is there a writing?
2. Is it integrated?
(If one or more terms of the agreement have been fully, finally and clearly expressed in the writing, it is a partial integration – that is it is a final statement o those terms.
If writing does not set out any term in full, final and certain form, it is unintegrated.
Fully integrated – complete and exclusive
If it is integrated, only consistent terms.
3. Is it partially integrated?.
• Why parol evidence?
Maybe to prevent abuse of contract writers
Force individuals to be very specific in their contract wording