Parol Evidence Rule

• Prior terms (parol evidence) not included in a final and complete agreement if they are inconsistent or if the writing appears to be complete.
  • If a contract does not feature the aspect, there will not be inconsistency.
  • Excludes evidence from coming to court
• Merger clause
  • Writing in contract says “This contract is complete. Nothing outside of the contract will be used.”
• Complete Integration
  • A contract integrates all agreements into writing.
  • Parties intend that a writing is complete and contains all terms that parties agree on.
• Partial Integration
  • The contract is complete on some terms, but not all.
    • When making the contract, the parties could have agreed on some terms orally, and some in writing.

• Law favors written contracts over oral regarding inconsistencies

Is The Contract Complete?

• Any relevant evidence is admissible
• A contract is complete if the writing appears to be complete to a reasonable person
• A contract is complete if the term(s) would naturally be contained within the contract
  • It makes sense that the term should naturally be within the contract
    • Ex: Barry Inc. and Sally Co. made a contract. Barry Inc. promises to build a guitar. Sally Co. promises to pay $2000 to Barry Inc. for the guitar. The contract contains terms that deal with minute details such as design of pegs, type of pegs (brand), density of guitar, etc.  String brand/density was not mentioned. It should have naturally been included, but was not. If they wanted a certain string in it, they would have mentioned it.
• The term(s) certainly should have been in the contract.