The Parol Evidence Rule Forbids Parties from Introducing Proof of Subsequent Agreements

The Parol Evidence Rule and Its Implications

When parties enter into a written agreement, whether it’s a contract, a purchase agreement, or any other type of legally binding document, it’s assumed that the written document contains all the terms of the agreement. The parol evidence rule is a legal principle that states that parties cannot go outside the four corners of the written agreement to prove the existence of an oral agreement or a subsequent agreement that contradicts or changes the terms of the written agreement.

The rule is based on the idea that written agreements represent the final and complete understanding between the parties, and that allowing evidence of prior or subsequent agreements would defeat the purpose of having a written agreement in the first place. The parol evidence rule applies to both oral and written agreements, and to both partial and complete agreements.

The rule has several implications for parties who enter into written agreements. First, it means that parties need to be careful when negotiating the terms of the agreement, and to make sure that all the terms are included in the written document. This includes not only the main terms of the agreement, but also any ancillary provisions, such as warranties, indemnification, and termination provisions.

Second, it means that parties cannot rely on any oral agreements or representations that were made outside the written document. This is particularly important when it comes to warranties and representations that were made during the negotiation process, as these can be difficult to prove in court without written evidence.

Third, it means that parties cannot change the terms of the written agreement without the consent of the other party. If one party wants to change the terms of the agreement, they need to do so through a written amendment or a new written agreement. This is important because it ensures that all parties are aware of the changes to the agreement and have agreed to them.

The parol evidence rule is not absolute, and there are exceptions to the rule. For example, evidence of prior or subsequent agreements may be admissible if it’s used to explain or clarify ambiguous or unclear terms in the written agreement. Similarly, evidence of fraud, duress, or mistake may be admissible to show that the written agreement was not truly a meeting of the minds.

In conclusion, the parol evidence rule is an important principle in contract law that ensures that parties to a written agreement are bound by the terms of that agreement. It requires parties to be careful when negotiating the terms of an agreement, and to make sure that all the terms are included in the written document. It also means that parties cannot rely on any oral agreements or representations that were made outside the written document, and that any changes to the agreement must be made in writing. While there are exceptions to the rule, it’s generally important to abide by it to avoid disputes and potential litigation down the line.