Management Research Assignment: Parol Evidence Rule (Essay Sample)

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PAROL EVIDENCE RULE
Introduction
Parol evidence rule is common contract rule that prevents either party from presenting an evidence that adds or contradict the written agreement. The rule is also clearly defined in the case of Mercantile Bank of Sydney v Taylor (1891) the rule stated that where the contract is reduced into writing it treated as entirely whole and it ignores all external evidence that seeks either to modify or add an extra clause to the original agreement. The written contract is considered as whole in this substantial contract common law. (Harwood) Allude that this rule inhibits concern parties in an agreement against the amendment of a written document using previous oral declaration. This rule was introduced by Innes j during the case of Goss v lord (1883).The principle purpose of Parol is to ensure there is integrity in any written agreement. Australia is viewed as having strict rules in contracts. As a results there the specific rule that every business is required to observe while signing a contract.
Parol evidence was applied and it was therefore held that it was not correct time for the concerned party to introduce the evidence that is at this point only the written document represented the correct agreement was signed by both parties. The Parol rule is very important and widely applied whenever there is a dispute in agreements.( Manitoba )alludes that Parol rule exist mainly to ensure there is originality of original document where the parties agree to merge the entire contract in writing and therefore it's given preference over the previously oral agreement. This does not imply that all contract must be written as it is upon the parties to agree on the nature of their agreement. This rule is justifiable especially when parties make the effort of writing down their agreement. This is mainly because Parol rules assume writings provide sufficient information regarding the contract. ( David W McLachlan)alludes that during contract agreement both parties tries to entice the each other and the initial agreement are usually oral.( Manitoba )alludes that Parol evidence classify these collateral agreement being outside the agreement.
Parol Evidence Rule
Parol evidence rule description as three main aspects, first the rule does not recognize subordinate evidence, these are best nonexistence evidence by the current situation. The rule also prevents any instrument outside the contract to change in order to increase or overthrow the text. Finally, Parol evidence rule confines the judge in the case of contract dispute only within construct pillars. It, therefore, follows that the judge does not rely on external or background evidence. Though this oral agreement explains the letter sometimes they are confusing hence Parol evidence rule suggests they are to be treated as extrinsic evidence. In the case of Ellul and Ellul v Oakes (1972), Ellluls Has Purchased a House from Oakes but oasis failed to sign has not signed the document. During the case, the judge applies Parol rule where he terms the Oakes claims as extrinsic which are not part of the agreement. His honor, in this case, is holding a position that the case is intended to force the purchaser to buy the property has it is not signed as an agreement by both parties.in this case the judge uphold judgment from similar cases of Oscar chess limited v Williams and also dick Bentley v heard.
Document interpretation is usually treated as a legal question in many countries including Australia hence the oral evidence becomes unreliable. In another case of Gordon v McGregor (1909) in the southern Australian court, Macgregor had signed a contract requiring Gurdon to supply cedar logs with average heights of sit to ten feet's and minimum quantity is to be delivered per week. Gordon delivers logs that are below the heights and consequently, he is taken to court for breaching the earlier contract.in first court Gordon succeed as he pleads there is the oral agreement to deliver logs after three months and that minimum heights are not specified in the agreement. However, when the case is appealed in high court Gordon loses as all judges agree there is no single proof to sustain his argument and the Parol rule is to apply in this case. Chief justice Griffith ruling holds where agreement is Parol is simply reduced to writings and nothing else is to be considered. His thoughts on the Parol rule are enough to dispose of the case unless the defendant is able to point that the written agreement is not meant to engulf the entire agreement.
(Harwood) alludes that it is important to write a contract and both parties to understand that they are conveyed by the writings on the contract. For example, the case of l estrange v F Glaucoma (1934) here the parties signed an agreement one party buying the cigarette machine. In the contract, there was a written clause providing the seller immunity against responsibility in case the machine is defective. However, the buyer, in this case, is not aware of the clause and signed the agreement. Later the plaintiff sued the defendant and succeeded in the trial court as he argued he was not aware of the clause. However, the ruling is appealed in high court where the judges apply parol rule ad dismisses the case .high court judges found that it's illogical the document is signed by the complainant yet he has not read it.
Exceptions to Parol Evidence Rule
Parties in a contract should be understanding that Parol evidence rule is not admissible to subtract, add or contradict any writing as ruled in the case of Kern land Pty Ltd v Robertson. Parole rule ensures the veracity of contract by denying a party an opportunity to alter agreement either orally or writings that are not in the original agreements. (Mercantile) alludes that we exclude oral evidence in situations. Therefore there various exceptions in which the rule does not apply. These includes the following;
In case parties are unable to come up with a complete written agreement. This results in a contract that is partly oral and partly written. As a result, there is collateral agreement hence extrinsic evidence is allowed to explain that the contract was made of both oral and written means. A collateral contract exists where the agreement consist of both written and oral means, in the case of Sheppard v council of municipality Rde Sheppard is buying a house from municipal council. during the contract Sheppard is assured that the opposite land was reserved for a park and that it was important to him, later the defendant wanted to subdivide the land for other purpose and shepherd sought for justice.in the case it is ruled that the agreement is collateral hence shepherd succeeded in his petition. It, therefore, worth noting that in this exception the courts allows the exception to clarify that the contract was not designed to be wholly written. This help to avoid the breach of Parol evidence rule objective.
Where there is custom or usage Parol evidence rule does not apply as these customs are admissible in courts. This exception is applied in Australia in the case of Bank Of Australia V Palma The Judge ruled that the local usage was successfully induced in the case as critical evidence hence admissible as an evidence in the case. The custom is not appearing in the written contract but it is admissible in court as a critical appraisal. This is another exception to Parol evidence rule.
In a place where the written agreement proves that it was verbally made the rule does not apply as extrinsic proves are admissible in courts in the case of dispute.Thes evidence is allowed mainly to proof that the contract is not operational. (Knapman) alludes that this exception is acceptable mainly because written document is neither changed nor is it negated by extraneous proof. In the case of corn Industry of Australia Pty v Norwich Winterthur (1986) the court detailed qualification for this exception, first the evidence derived from custom must be familiar and well known, it must be uniform as well and also clear just like the written contract is.Also it worth noting that if the evidence contradicts the written contract in any way it is not admissible in court .it's also possible for one to sign a contract bound by custom usage while he or she is not aware of it.
Suspension of operation becomes the fourth exception that comprises of the Parol evidence. Notably, this exception outlines that when performing a contract operation that is formally written, the contract is taken as the subject verbally based on named occurrence or continuation of particular forms consisting of the presented affairs. Previous studies by () shows that to provide evidence that a certain contract has not started its operational functions, extrinsic evidence should be adduced. Alternatively, this evidence is also presented when the operation of the contract is held. The reason for this exception is because courts outline that extrinsic evidence forms the framework of showing that it does not contradict or differ from the written agreement. For instance, this exception is clearly clarified when taking into account Pym and Campbell (1856) when Pym had an intention of selling multifunctional machine invention belonging to Campbell.
To survive this dilemma, an agreement between the two parties was made giving Pym an opportunity to make explanations about the production function of the machine to the two engineers representing Campbell. In light of this, if Pym's idea was to be approved by Campbell engineers, this would demand that Campbell should purchase Pym's intervention. The two parties arranged a meeting with the presence of the two engineers. On the meeting day, Campbell and the two engineers presented themselves but Pym did not appear. On his arrival, one of Campbell engineer had left and he went to the extent of appro...