Contracts - E&E - The Parol Evidence Rule

State 1: The judge's determination

1 - THe first issue to be resolved by the judge is the question of integration. is the writing a full and final record of the agreement as a whole (that is, a complete integration)? If so, we do not get beyond the first inquiry, because the parol evidence may not be admitted 2 - if the writing is not a complete integration, consistent supplementary parol evidence is admissible. the jduge's inquiry then turns to wehtehr the proffered parol evidence is in fact consistent with and not contradictory to what has been written. if it contradicts the writing, it may not be admitted, and it still never reaches the jury

Parol evidence rule

1 - based on the principle that when the parties reduce their agreement to writing, they often intend the written record to be the final expression of hteir agreement 2 - that is, they intend it to supersede anything that might have been proposed, discussed, or agreed to prior to execution (oral or written) of the wriritng but not ultimately recorded in the writing 3 - accordingly, the factfinder shouldn't hear evidence of terms that were allegedly agreed to but are not reflected in the writing 4 - this evidence is suspect, unreliable, and irrelevant, and is more likely to mislead and confuse than to inform the factfinder 5 - the rule doesn't absolutely bar all parol evidence. the purpose of the rule is to exclude presumptively irrelevant or conconcted teistimony, but not honest and pertinent evidence of what was actually agreed. the rule must therefore be sufficiently fien-tuned to allow the court to make this distinction.

Collateral agreement rule

1 - even where a contract is integrated, if the parol agreement is sufficiently distinct from the scope of the writing, it can be seen as a different contract, related to but separate from the integrated written agreement. if so, evidence of this collateral agreement is not barred by the parol evidence rule 2 - even if the alleged parol agreement relates to the same transaction as th writing, if it is self-contained and distinct enogh to be seen as a collateral agreement, the partis may not have intended to be covered by the integrated writing 3 - the requirement of consistencey applies even where the parol agreement is found to be collateral, so evidence of a collateral agreement that contradicts the writing may not be admitted 4 - generally both the subject matter of and the consideration for the parol agreement must be distinct and capable of being separately identified

When is parol evidence admissible?

1 - if the judge's preliminary inquiry into the evidence leads to the determination that the subject matter covered by the alleged term has not been integrated into the writing and that the proffered parol evidence is consistent with what has been written, the judge rules the evidence admissible 2 - it may then be presented to the factfinder, which is responsible for the ultimate decision on whether the term was agreed to

Determining the question of integration

1 - many modern courts recognize that a strict and invariable 4 courners approach may disregard contextual evidence that is helpful in deciding intent to integrate 2 - even whena writing appears at face value to be comprehensive, inquiry into the contet in which it was written may dispel this mpression. 3 - therefore in deciding the question of integration, a contemporary court may go beyond the face value of the writing to reach a decision on whether the parties intended an integration. 4 - thi doesn't mean the courts will always will always consider extrinsic evidence in deciding integration. even courts that are generally receptive to extrinsic evidence may refuse to consider it where the intent to integrate is strongly expressed in the writing, particularly where the wirting contains a merger clause tha texpresses the intent to integrate.

Terms allegedly agreed to contemporaneously with the written contract

1 - the parol evidence rule covers only evidence of oral agreement made contemporaneously with the final writing. the bar on evidence of contemporaneous oral agreemtn doesn't extend to evidence of contemporaneous written agreement 2 - first, the existence of a writing is more reliable evidence of agreemtn that oral testimony 3 - second, a contract need not be contained in a single document, so that where there are contemporaneous writings, it may hnot be clear that one of htem was intended to supersede the otehr

Parol evidence; judge and jury

1 - the rule contemplates a two-stage process. when the parol evidence is proffered, the judge must make an initial finding of admissibility. if the judge finds that the evidence is admissible, it is presented to the fact-finder that hears the testimony and makes the ultimate finding on credibility. 2 - the judge's initial determination is characterized as a question of law, but it is not necessarily devoid of factual evaluation. 3 - although the factfinder may eventually have to decide if the evidence is believable, the judge, in making the initial decision on admissibility, is also concerned with the plausibility of the proffered evidence

Merger clause

1 - this is common to find a provision in a written contact to the effect htat the written contract is the entire agreement between the parties, and that no representations or promises have been made save for htose set out in the writing 2 - it signifies that all the terms of the agreement have been merged into the writing 3 - a merger clause can be effective in disposing of the issue of integration and insulating the writing from parol evidence 4 - sometimes courts will go behind a merger clause and admit parol evidence, whre, under all the cirucumsstances of the transaction, one of the parties makes a plausible argument that, despite appearnces, the writing is not really integrated, and the alleged parol term can be reconciled with it

purpose of the parol evidence rule

1 - to control the jury's decision making. it allows the judge to restrict the information given to the jury, thereby shielding it from evidence the judge finds to be suspect and unreliable 2 - it promotes efficiency in the conduct of litigation. by excluding suspect evidence at the outset, the judge saves the time that would otherwise be wasted in presenting the evidence to the jury 3 - may promote transactional efficiency. b/c it exists, parties are more likely to make an effort to record their agreement fully and accurately

Application of parol evidence rule

the parol evidence rule applies where an agreement is recorded in writing and one of the parties proffers evidence to prove a term that is not contained in the writing or to explain or expand on a term in the writing