Discussion on Parol Evidence Rule

The writer has discussed that the definition of Parol Evidence Rule, a substantive common law rule in contract cases and various ome established exceptions to the rule that will be acknowledged by the courts. The write also has simply introduced that subsidiary agreement or contract negotiations to ensure the party is usually in order to attract each other and made some promises or statements, such as the sellers agreements to “blowing his own trumpet,” but these promises or statements not recorded in the instrument contracts.

INTRODUCTION

Definition of Parole Evidence Rule: a substantive common law rule in contract cases that prevents a party to a written contract from presenting evidence that contradicts or adds to the written terms of the contract that appears to be whole. Offering an opinion on the area of law covered by the topic and the direction in which the law is heading:

Indicating structure of discussion: firstly, it will provide the development of Parole Evidence Rule, and then it will focus on the current trends in the relevant area of the rule. Finally, it is going to discuss the recent developments in the common law and provisions in relevant legislation.

AGREEMENT

The saying of collateral contract is also belong to this category. It is usually that a party make some promises in order to attract the other party agrees before making a commitment, but the promises are not recorded in the contract documents, the law would put the contract is outside commitments as a collateral contract.

PAROL EVIDENCE RULE

In order to further discuss the context, firstly, introduce to explain which evidence of the problem is acceptable by contract terms or words, including the parol evidence. Parol evidence refer to some records and processes of the pre-contractual negotiations, whether parol or paper.

Definition of Parol evidence rule.

Parol evidence rule is a substantive common law rule in contract cases that prevents a party to a written contract from presenting evidence that contradicts or adds to the written terms of the contract that appears to be whole.

There are three aspects to discuss the definition of Parol evidence rule.

Firstly, not accepting some subordinate evidences, that is to say, the non existed best evidences by current statement circumstance.

Secondly, instruments are not allowed to provide evidence outside the contract to change in order to overthrow or to increase the provisions of the document or text.

Thirdly, It has been a judge is usually confined within the four corners of the contract documents to explain, can not accept and consider the background of the external evidence.

Reasons that do not accept the parol evidence or the external except evidence of contract

Ordinarily, British law treat the interpretation and provision of the contract documents or words as a legal question, so as there should not have issue about evidence. It treated as extrinsic evidence, should refuse to go as far as possible. Even though they will explain the provisions of the agreement or letter has some help (or confusion).

It obviously that exclude oral evidence only in a situation. That is to enable to assume that the two parties have already agreed between them all recorded in an instrument of contract, it usually is a signed contract. It’s reasonable to respect the two sides have opened the eyes to record the contract, then “great inconvenience and troublesome litigation in many instances”:Mercantile Agency Co Ltd v. Flitwick Chalybeate Co (1897) 14 T.L.R. 90 [1] .

THE EXCEPTION THAT ACCEPT THE PAROL EVIDENCE

Obviously assumption is untenable in many situations, so to exclude parol evidence already in existence for a number of exceptions. For example, if an instrument is able to prove that the contract is not agreed upon all sides, but only part of the contract. For example, the agreement is part of the recorded in text but the other part is in the oral format. Lord Rusell said in “Gillespie Bros. & Co v. Cheney, Eggar & Co (1896) 2 Q.B. 59” [2] “…although when the parties arrive at a definite written contract the implication or presumption is very strong that such contract is intended to contain all the terms of their bargain, it is a presumption only, and it is open to either of the parties to allege that there was, in addition to what appears in the written agreement, an antecedent express stipulation not intended by the parties to be excluded, but intended to continue in force with the express written agreement.”.

Another exception is subject to dispute the validity of the contract, for example, contract documents are pointed out that shows the alleged error or violation of legislation, it can be to extract Chitty on Contract Edit. 29, 12-106 [3] : “No Contract. Extrinsic evidence is admissible to show that what appears to be a valid and binding contract is in fact no contract at all. Thus evidence may be admitted to show that one or both parties contracted under a mistake, or that a person who signed the document was under a misapprehension as to the real nature of the transaction into which he had entered so that it was ‘not his deed’ in law. Also it may be shown that the writing was not intended by the parties to give rise to contractual obligations or that the contract is void for non-compliance with a statute.”

To show that an unambiguous term in the contract is in fact a mistaken transcription of a prior valid agreement.

Technical or scientific language

Technical and scientific terms often encountered, in this case, judges or arbitrators based on common sense or dictionary to explain the general interpretation of these terms is not enough, it will be impossible to find the dictionary, but the need of external evidence other than contract(Including expert opinion evidence) to secure an explanation. In this case, early in Shore v. Wilson (1989) 9 Cl. & F. 355 [4] , the explanation have been confirmed.

Trade usages or terms

Including business practices or practice can be to change the express provisions of the contract or letter of explanation. This often requires external evidence to determine whether to accept such business practices or practice. These external evidence have accepted and referred in Shore v. Wilson (1989) 9 Cl. & F. 355. [5] And Bowes v. Shand (1877) 2 App Cas 455 [6] ,Lord Cairns. “That of course would, according to the well-known rule of law, which admits parol evidence not to contradict a document, but to explain the words used in it, supply as it were, the mercantile dictionary in which you are to find the mercantile meaning of the words which are used. That would be a legitimate and well-known mode of construing the document. “.

To show wrongful conduct such as misrepresentation, fraud, unconscionability or illegal purpose on the part of one or both parties;

This is not the intention of the defendant’s contract to provide the relevant facts and the facts established in the contract damages (non est factum and vitiating factors)

About the definiation of non est factum, it is define as a doctrine in contract law that allows a signing party to escape performance of the agreement. A claim of non est factum means that the signature on the contract was signed by mistake, without knowledge of its meaning, but was not done so negligently. A successful plea would make the contract void.

This happens generally with fraud, for example, in Saunders v. Anglia Building Society (1971) AC 1004 [7] . The old woman thought she was going to sign the house as a gift to her nephew, but in fact nothing of the sort.

The concept of non est factum in early 16th century in some cases is not involving fraud, the blind, illiterate and are unable to (incapacity) of the contracts. But it does not apply to negligent or careless in some situations, Even as Lord Reid in Saunders v. Anglia Building Society (1971) A.C. 1004 [8] said: “The plea cannot be available to anyone who was content to sign without the trouble to try to find out at least the general effect of the document.”.

characterization or sham

As different contracts will be governed by different legislation, the legislation will bring some different privileges or strict liability. This is the basis of all the evidence the court to go to the contract rules of the class.

Sham is a contract with legal consequences to pretend for a deal. This is not a good contract creating legal relations often involve fraud, but fraud will not necessarily be classified as false Bureau contract.

To investigate whether and to prove that a contract is false Bureau contract, which would involve acceptance of foreign evidence, including oral evidence before the contracting and contracting after the behavior.

Lord Jauncey said in A G Securities v. Vaughan (1990) 1 A.C. 417, 475 [9] . “… although the subsequent actings of the parties may not be looked at for the purpose of construing the agreements they may be looked at for the purpose of determining whether or not parts of the agreements are a sham in the sense that they were intended merely as ‘dressing up’ and not as provisions to which any effect would be given. “.

If the court finds from the evidence of the relevant contract is a fake Board contracts will go to classified (for example, are another type of contract) or to declare the fact that the contract does not exist.

To make changes in the contract after the original final contract has been agreed to. That is, oral statements can be admitted unless they are barred by a clause in the written contract.

Surrounding circumstances

The surrounding circumstances here is the background or context, is explained in the previous contract were not taken seriously and can only be limited to the contractual provisions in the instrument or text is not clear or difficult to explain. For example Lord Blackbure said in River Wear Commissioners v. Adamson (1877) 2 App Cas 743, HL [10] , “If the words have a clear and fixed meaning, not capable of explanation, extrinsic evidence would not be admissible to show that the parties meant something different from what they would have written.”.

Subject matter or identity

Early in Shore Wilson (1842) 9 Cl & F 355, 525；4 ER450,HL, Parke [11] , said as “… every material fact which will enable the Court to identify the person or thing mentioned in the instrument, and to place the Court, whose province is to declare the meaning of the words of the instrument, as near as may be in the situation of the parties to it.”. Case: Raffles v. Wichelhaus (1864) 2 H&C 906 [12] . Raffles contracted to sell 125 bales of Surat cotton to Wichelhaus. The goods were to be shipped from Bombay to Liverpool, England on the ship “Peerless”. Neither party was aware that there were two ships names “Peerless” carrying cotton from Bombay to Liverpool, one arriving in October and the other in December. Wichelhaus thought he had purchased the cotton arriving on the October ship, but Raffles sent his cotton on December ship. Wichelhaus refused to accept delivery of the cotton arriving on the December ship and Raffles brought this lawsuit for breach of contract.

When the contracting parties not ‘speak the same language’, in fact, two parties did not think the same idea or ‘meeting of minds’. In this case the court agreed that there was no valid contract.

In the above precedent, the court accepted the contract other than the external evidence, otherwise it is not shown when the plaintiff and the defendant in their contracting the subject of different contracts.

To resolve an ambiguity in the agreement.

Foreign language

If a contract with a foreign language, the court can accept external evidence to make a translation of the contract, which is in Shore v. Wilson (1989) 9 Cl. & F. 355 [13] were confirmed. The case is Glymn (Covent Garden) Ltd v. Wittleder (1959) 2 Lloyd’s Rep [14] . It is CIF contract about a sale of German potatoes. The contract is partly in German, and partly in English. Sentenced to a British buyer is being translated into English by the German part of the provisions or language constraints.

The case that one word has more than one meaning to explain, but one of them pointed out that the interpretation of the two sides agreed to negotiate

There is a case in Karen Olrmann (1976) 2 Lloyd’s Rep. 708 [15] . It is about a two-year time charter contract, but there is an additional provision to the lessee in the 12 months after the operation the right to choose to also ship as long as 3 months advance notice to, it said: “Charterers to have the option to redeliver the vessel after 12 months trading subject giving 3 months’ notice.”.

To correct mistakes in the contract.

Document not intended to be whole contract. It is already said that a document such as a signed contract would be the assumption that both parties intended as a complete record of the contract. But this is only assumption can be rebutted, for example, some of the written part of the court to accept an oral agreement, or the situation of the subsidiary agreement. It is clear that the contract appears to be as complete only one situation in which the file has a very wide range of entire agreement clause.With such a provision would in most cases exclude oral evidence, only to the provisions of the contract or text shall prevail.

Summarization of exceptions of Parol Evidence Rule

Because there are too many exceptions, no wonder the British Law Commission in 1996 (Law Commission) the the Parol Evidence Rule by the report that only in the development process in the common law left over from history, and recommended to repeal, said:”We have now concluded that a parol evidence rule … which on occasion may have been applied to exclude or to deny effect to relevant evidence, no longer has either the width or the effect once attributed to it. In particular, no parol evidence rule today requires a court to exclude or ignore evidence which should be admitted or acted upon if the true contractual intention of the parties is to be ascertained and effect given to it.”

COLLATERAL CONTRACTS

A collateral contract is a contract where the consideration is the entry into another contract, and co-exists side by side with the main contract. For example, a collateral contract is formed when one party pays the other party a certain sum for entry into another contract.

If the negligence caused these statements not correct, in 1967, before “Misrepresentation Act” become effective, as common law misrepresentation only to be divided into two types, one is fraudulent misrepresentation, the other is innocent misrepresentation.

This has led to negligent misrepresentation unless it can be upgraded to the seriousness of fraudulent misrepresentation, they often make the injured party did not claim loss relief. This way, the court in order to be fair, they often go to this negligent misrepresentation as another contract or guarantee can be called “subsidiary agreement or guarantee.” clearly go to prove the existence of this contract or warranty, the contract is outside the instrument, we must see oral evidence of the negotiations the.

One case is City of Westminster Properties Ltd v. Mudd (1959) Ch 129, Ch D [16] , The court is a rental shop, the contracting negotiations, the landlord knows the tenant is to be used as an antique shop and home at the same time, but the lease is expressly not allowed to shop for residential. Before the signing of the contract, the landlord told the tenants of the oral agent would not object to him to continue living. However, the landlord go back on his words later. But the court held that the landlord is subject to the restriction of his promise before sign the agreement.

Another case is that the merits of the case can go a little introduction, it involves a bar in London for 30 years lease, lease contracts have a clause requires the tenant, the landlord movement of some of the designated beer beer suppliers. The beginning, in 1996, rent customer purchased 280 barrels of beer. but then plummeted, to April 1998, the tenant simply stopped to buy beer from the designated supplier to show tenants to purchase through other channels. landlord to court for an injunction to try to ban tenants to do so. Tenant’s defense is in the signing of the contract, the landlord had verbally agreed to said that it was in March 1998, will be open to the tenants of these purchases beer constraints, which constitute the subsidiary agreement or guarantee. But according to the evidence, Lightman Justice finds that the landlord has not made such a promise or guarantee. Moreover, tenants are more deadly in the lease agreement there is a “complete contract provisions”, eliminated the subsidiary agreement or guarantee

CONCLUSION

The importance of the distinction between partial and complete integrations is relevant to what evidence is excluded under the parol evidence rule. For both complete and partial integrations, any evidence contradicting the writing is excluded under the parol evidence rule. However, for a partial integration, terms that do not contradict the writing but merely add to it are not excluded.