Define: Parol Evidence Rule

The Parol Evidence Rule is a principle of contract law that limits the use of extrinsic evidence to interpret or contradict the terms of a written contract. According to this rule, when parties have reduced their agreement to writing, any prior or contemporaneous oral or written agreements, discussions, or negotiations that are not included in the written contract generally cannot be introduced as evidence to modify, add to, or contradict the terms of the written contract. The rule aims to promote finality and certainty in contractual relationships by emphasizing the importance of the written document as the complete expression of the parties’ intentions. However, there are exceptions to the Parol Evidence Rule, such as cases involving fraud, mistake, ambiguity, or incomplete agreements. In such cases, extrinsic evidence may be admissible to clarify or supplement the terms of the written contract.

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This glossary post was last updated: 29th March, 2024.