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Extrinsic Evidence: Grasping the Parol Evidence Rule

Part of the Contract Law For Dummies Cheat Sheet

Parol evidence is evidence of terms or understandings extrinsic to (not included in) a written contract. Courts follow the parol evidence rule to determine whether the evidence is admissible. Here’s the rule itself:

Once the parties have reduced their agreement to a writing that they intend to contain the final and complete statement of their agreement, then evidence of terms that would supplement or contradict it are not admissible.

And here’s how to apply the rule:

  1. Determine whether the parties intended the writing to be final.

    If yes, evidence may be offered to supplement the writing but not to contradict it. If no, evidence may be offered to supplement or contradict the writing.

  2. Determine whether the parties intended the writing to be complete as well as final.

    If yes, evidence may not be offered to contradict or supplement the writing. If no, evidence may be offered to supplement the writing but not to contradict it.

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