Parole Evidence Rule in Terms of Contract:

Parole Evidence Rule:

When a contract is written, the written document is taken to contain all the terms of the contract, and external evidence will not be admitted to contradict, vary, subtract, or add to the terms contained in the written agreement.

For example, when the written agreement says X will pay $10 for a product, the courts will not admit external evidence which claims that X will pay less or more for the product.

In the case of Routledge v McKay, the court held that the failure to include in the written agreement the model number of a motorcycle in a contract to purchase the motorcycle, meant that oral representations on the model number of the motorcycle would not be admitted to form part of the terms of the contract.

In the case of Motor Parts Trading Co v Nunoo, the Supreme Court did not admit the submission by the respondent that the appellant violated a collateral oral contract which was not contained in the written agreement.

Similarly in the case of Wilson v Brobbey, the court stood by the parole evidence rule when it held that external evidence would not be admitted to establish that Brobbey signed a document only as a guarantor and not as a purchaser of goods acquired on credit.

Exceptions to the Parole Evidence Rule:

Whilst the courts would not generally admit parole evidence to alter terms contained in a written document, parole evidence may be admitted under the following conditions:

1. Admitting parole evidence to resolve ambiguities in the written contract:

If a particular term of the contract is not clear, the courts may rely on parole evidence to resolve the ambiguity. In the case of Robertson v Jackson [1845], a written contract involving the onloading of goods at a specific port contained the phrase “turn to deliver”, and it was unclear when the ship’s “turn to deliver '' would arise. The court accepted oral evidence on the custom pertaining to that port to clarify the terms.

2. Admitting parole evidence to prove the existence of a collateral contract:

In the case of De Lasalle v Guildford , the plaintiff refused to hand over the signed counterpart lease to his potential landlord till he was assured that the drains were in good order. The landlord gave his assurance that the drains were in good order, but this information turned out to be false. Although the oral representation from the landlord was not contained in the written contract, a suit by the tenant succeeded because the court saw the assurance as a separate contract which was consideration for the tenant entering into the main contract.

3. Parole evidence may be admitted to establish the existence of vitiating factors such as mistake, misrepresentation, duress, undue influence, fraud.

In the case of Curtis v Chemical Cleaning & Dyeing Co& Dyeing Co, the courts accepted extrinsic evidence to hold that although the written document excluded the defendant from liability for damages to the wedding dress of the claimant, the extrinsic evidence reveals misrepresentation and therefore the company could not be excluded from liability.

4. When a written document is incomplete because it was not intended to contain all the terms of the agreement, extrinsic evidence will be admitted to fill the gaps. See the case of Allen v Pink.

5. Extrinsic evidence may be admitted to prove the existence of customs:

Sometimes, some terms of contract are implied by custom. The courts may admit external evidence to establish the existence of such customs.

In Hutton v Warren, the courts admitted customary practice to hold that although the written lease between Hutton and Warren did not place an obligation on Warren to compensate Hutton for his expenditure on a piece of land, customary practice implies such obligation.

6. Extrinsic evidence may be admissible to establish a plea of non est factum:

When a person claims that a signature on a written document is not his deed, the courts may admit extrinsic evidence to prove this claim.

For a claim of non-est factum to be successful, the party making such claim must show that his signature was procured by fraud, and he that he did not act negligently.

7. Where it is shown that a written document was intended to record an oral agreement and the contents of the written document does not accurately reflect the oral agreement, the written document will be rectified prior to enforcement.

In Joscelyne v Nissen, the courts accepted extrinsic evidence to rectify a written document when the evidence showed that a daughter and father intended for the daughter to cater for household expenses after the father transferred his business to her. Similarly in P.Y Attah versus Kingsman, the supreme court of Ghana modified a written lease agreement to give effect to what they considered the true intention of the parties.

8. Evidence to vary the terms of a written agreement is not admissible but evidence to show that a written agreement is not an agreement at all is admissible:

In Pym v Campbell, the court accepted oral evidence to show that a written agreement for the purchase of the profits that accrued from an invention was conditional on the approval of the defendant’s engineers.