[Contract] Parol Evidence Rule and Terms

1.0 Parol Evidence and its Requirement

“The parol evidence rule” prohibits the admission of evidence to subtract from, add to, vary or contradict the written document.

There is presumption that written document is intended to be whole contract

Look outside document to find intention (Stoddart Tiles v Alcan)

Presumption depends on the nature, form and content of the written contract (Nemeth v Bayswater Road)

But older cases apply the rule strictly (Gordon v McGregor; Thorne v Borthwick)

REQUIREMENT

  1. A conflict between a prior oral contract and a later written contract. 

1.1 Exceptions to parol evidence 

There are, however, exceptions to parol evidence;

  1. Where parties not to have intended their document to be exhaustive and conclusive statement of their rights and obligations (Hutton v Warren);
  2. Where parties adduce oral evidence to establish that a written document does not constitute the whole of the contract (Van Den Eschert v Chappell)
  3. Parol evidence rule may be avoided by recourse to the doctrine of rectification and the recognition of oral collateral contracts. (These two topics are discussed in other posts)
1.1.1 Van Den Eschert v Chappell

A contract had been signed for the sale of a house. Before signing the contract the purchaser inquired of the vendor as to whether there were any white ants in the house and the vendor replied that there were none. No reference was included in the written document as to this oral exchange, but on the strength of it the purchaser signed the contract. Several months later the purchaser discovered that the house was infested with white ants and successfully sued the vendor for the cost of their eradication relying on the vendor’s statement. The court attached importance to the fact that the inquiry as to white ants had been made of the vendor immediately before the contract was signed. 




*EXAM TIP* How to see if this is relevant

The parol evidence rule is irrelevant if there is no later written contract with which any oral contract could conflict.


Comments

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