Parol evidence

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An old-fashioned idea that once a contract is reduced to writing, any other evidence of the parties’ agreement or intentions must be ignored: in many ways a companion piece to the equally fusty “no oral modification” rule, which in the hands of well-meaning but misguided commercial judges has been enjoying a bit of an Indian summer as of late. In practice there are exceptions — the common law of equity is basically one big exception — and you will usually need at least an entire agreement clause, unless your contract is of the sort that is required by law to be in writing.

The contract versus the written agreement

The contract, consensus ad idem is an immaterial thing. It has no physical extension. It does not intrude on the mortal plane. Its best Earthly representative is the written agreement, a memorial on parchment wherein the parties do their best to set out the boundaries of their compact. The document is not the contract; the contract is not the document — they are spirit and flesh; a Platonic ideal and its flickering shadow on the grotto wall.

But if there should be some executed paper — for most contracts there need not, but let’s just say there is — a court will be disinclined to look beyond its “four corners” when divining the parties’ commercial intentions in signing it. This is in part convenience, in part laziness, but in part the fair assumption that, since the parties were bothered to write down the important parts of their agreement, anything they didn’t write down either didn’t exist or can’t have been important enough to justify memorialising. In this way the Platonic form of the contract and its bodily extension into our decadent organic realm become one. It’s rather biblical.

Since an issue that has attracted the attention of the Queen’s Bench Division must be important, the Court’s doubt will benefit not one party or the other, but the paperwork both of them signed. The Lord is not your witness, so the signed written record will have to do.

This rule against extraneous evidence — as with so many historic principles of the common law, these days a diminished thing — is known as the “parol evidence” rule.

The unilateral contract

Curiously, the foregoing is less obviously true in the case of a unilateral contract which is signed by neither parties: for example the famous carbolic smoke-ball. In that unique case, the immaterial consensus ad idem and the written form of the contract, albeit unsigned, are coextensive. There is no other articulation of the agreement.

See also

• No oral modification
• Electronic execution