Lecture on Parole Evidence Rule

Introduction

• Context: Continuing from lessons on defenses in contract law.
• Focus: Determining contract terms, understanding obligations, and assessing breaches.
• Key Question: What are the terms of a contract, and how do we establish them?

Parole Evidence Rule Overview

• Purpose: Determines what evidence can establish the terms of a contract.
• Typical Scenario:
  • Parties have a written agreement.
  • A dispute arises about terms not explicitly in the written contract.
  • One party insists on the written terms, the other claims oral agreements exist.

Example Scenario

• Setup:
  • Tracy sells a hotel with furniture for $2 million.
  • Oral agreement: 1-year payment period.
  • Written agreement: Hotel (no furniture), 6-month payment.
• Discrepancy: Written contract differs from the oral agreement.
  • Oral: Hotel & furniture, 1-year payment.
  • Written: Hotel only, 6-month payment.

Legal Analysis

• Court's Role: Deciding if oral conditions should be considered.
• Parole Evidence Rule Application:
  • Issue: Is there a parole evidence problem?
  • Integration Examination: Determine if the writing is a final and complete expression.
  • Types of Integration:
    • Total Integration: Final and complete.
    • Partial Integration: Final but not complete on all terms.
    • Not Integrated: Not the final expression.

Jurisdictional Approaches

• Classic (Four Corners): Only the writing is considered.
  • A merger clause is dispositive.
• Modern: Considers all surrounding facts and circumstances.
  • A merger clause raises a presumption, not conclusive.

Outcomes Based on Integration

• Total Integration:
  • No extrinsic evidence allowed.
• Partial Integration:
  • Consistent additional terms can be admitted.
  • Contradictory terms are excluded.
• Not Integrated:
  • All extrinsic evidence is admissible.

Application to Example

• Furniture Term: Consistent additional term (admissible).
• Payment Term: Contradictory (not admissible).

Exceptions to the Parole Evidence Rule

• Purpose of Offering Evidence:
  • Interpretation: Explain, not change terms.
  • Subsequent Agreements: Agreements made post-writing.
  • Formation Defenses: Offering evidence to prove defenses.
  • Collateral Agreements: Separate agreements not altering main contract.
  • Conditional Precedents: Agreements contingent on other terms.

Conclusion

• Understanding the Problem: Recognize the scenario and reason for offering evidence.
• Practical Steps:
  • Determine integration level.
  • Assess admissibility of evidence.
  • Consider applicable exceptions.