Henderson v Arthur - 1907

Henderson v Arthur [1907] 1 KB 10

Considers the ‘parole evidence rule’ and determines that a written agreement supersedes earlier additional oral agreements between parties.

Facts

The claimant, Henderson, was a seller who agreed to give a lease of a theatre to the defendant, Arthur, as a tenant. Per the agreement, the defendant promised to make rent payments within a specified timeframe, however prior to the agreement’s signing, the parties had verbally agreed that the claimant would accept debts as rent payments. The claimant subsequently attempted to bring an action against the defendant, contending he had failed to make the required rent payments, whilst the defendant retorted that the claimant had originally stated he would accept debts and was now reneging on this.

Issue

Whether the parties’ earlier oral agreement was binding, despite the contents of their later written agreement.

Decision/Outcome

The Court of Appeal found for the claimant, viewing that the written contract superseded all other agreements, and invalidated any differing prior agreements between the parties. Moreover, the Court viewed that the circumstances in which they ought reasonably consider extrinsic evidence when interpreting a contract was limited and as the defendant could have included the contents of the oral agreement in the written agreement, but failed to do so, they could not then attempt to rely upon the oral agreement at a later date. Further, the Court viewed that it was necessary to presume that the final written agreement between parties is the exclusive and finalized version for the sake of legal certainty and respect for the principle of sanctity of contract.

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