Exceptions to the Parol Evidence Rule - Explained
Allowing Outside Information when Interpreting a Contract
Written by J. Mance Gordon
Updated at April 19th, 2024
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Exceptions to the Parol Evidence Rule?
Extrinsic evidence or information prior to or contemporaneous with the formation of the contract cannot be introduced to contradict the contract. Nonetheless, it may be necessary to employ extrinsic evidence or information from outside of the contract for the following reasons:
- to aid in the interpretation of existing terms (for example, when an ambiguity exists),
- to show that a writing is or is not an integration,
- to establish that an integration is complete or partial,
- to establish subsequent agreements or modifications between the parties (i.e., those arising after the contract is completed), or
- to show that the terms of the contract were the product of illegality, fraud, duress, mistake, lack of consideration or other invalidating cause.
These exceptions exist to reduce misunderstanding and fraud between the parties and to promote judicial efficiency in the interpretation of agreements.
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