The Parol Evidence Rule
Written Contracts with Oral Terms? Contracts come in many forms. Some are simple and oral. Some are complex and written. Some involve both oral and written terms. If a contract is completely written out and intended by the parties to be the expression of their final deal—a complex, negotiated merger deal between multinational corporations, for example—the natural tendency is to rely solely on the writing. On the other hand, if there is no writing at all, oral testimony or other evidence is necessary to prove the nature of the deal. But what about situations where some parts of the deal are in writing and some are not? You have experienced this directly. When you buy something at a local store and sign a receipt, there is a writing that shows at least the price of the item. But most of the other terms of the deal—can you carry it out or will it be delivered, what warranty does it carry, can it be returned to the store, and so forth—will either have been discussed orally or not discussed at all. If the goods turn out to be defective, you will have a contract and there will be a writing evidencing it—but all the rest of the terms will have to be supplied by oral testimony or other evidence—categories that the law traditionally calls “parol evidence.” Parol is for Contracts; Parole is for Convicts. The word “parol” —please note the lack of a final “e”1 so you can avoid looking silly to other lawyers—is a French term for “oral.” Nonetheless, parol evidence as used in contract law does not solely mean “oral” evidence, it means any evidence other than what is in the written The Parol Evidence Rule FOCUS OF THIS UNIT Written Contracts with Oral Terms? Contracts come in many forms. Some are simple and oral. Some are complex and written. Some involve both oral and written terms. If a contract is completely written out and intended by the parties to be the expression of their final deal—a complex, negotiated merger deal between multinational corporations, for example—the natural tendency is to rely solely on the writing. On the other hand, if there is no writing at all, oral testimony or other evidence is necessary to prove the nature of the deal. But what about situations where some parts of the deal are in writing and some are not? You have experienced this directly. When you buy something at a local store and sign a receipt, there is a writing that shows at least the price of the item. But most of the other terms of the deal—can you carry it out or will it be delivered, what warranty does it carry, can it be returned to the store, and so forth—will either have been discussed orally or not discussed at all. If the goods turn out to be defective, you will have a contract and there will be a writing evidencing it—but all the rest of the terms will have to be supplied by oral testimony or other evidence—categories that the law traditionally calls “parol evidence.” Parol is for Contracts; Parole is for Convicts. The word “parol” —please note the lack of a final “e”1 so you can avoid looking silly to other lawyers—is a French term for “oral.” Nonetheless, parol evidence as used in contract law does not solely mean “oral” evidence, it means any evidence other than what is in the written states. Even within a given state, rules can be confusing because courts sometimes use different words to mean the same thing, and sometimes us the same words to mean different thing. Two states might use the same language but come to different results while two other states might use different language but come to the same result. You will ultimately find that the parol evidence rule is seldom ironclad. Evidence of prior and contemporaneous parol agreements will sometimes be admitted despite what seems to be a straightforward bar.
READ THE FOLLWING, AND ANSWER WITH 100 WORDS, NO REFERENCE NEEDED
Corvallis Rendering Co. is a plant that turns waste animal tissue into useful products. It purchases scraps from slaughterhouses, animals that have died from natural causes, spoiled meat from grocery stores, carcasses of dead horses and pets from animal shelters, etc., and turns them into valuable products like grease, tallow, and bone meal. One of Corvallis’s biggest suppliers is Oregon Meat Packers, Inc. (OMP), which operates a beef slaughtering and packing house. OMP and Corvallis sign a contract under which OMP will sell all of its scraps and offal to Corvallis. The contract is a detailed agreement which is a standard form supplied by the Oregon State Meat Packing and Rendering Association (of which both Corvallis and OMP are members). It provides a number of terms and includes a merger clause. The contract provides that for each load of material that OMP sends to Corvallis, Corvallis will pay 27¢ per pound “provided that the protein content of the material is at least fifty percent (50%) protein, as tested on delivery at Corvallis’s plant. If the protein content is less than 50%, Corvallis shall pay 24.5¢ per pound.” When OMP delivers several loads of material that test at 49.5% protein, Corvallis sends a check reflecting the 24.5¢ price. OMP argues that it should have been paid at the higher 27¢ amount, since trade usage in the Oregon rendering trade is that 49.5 percent is always rounded up to 50 percent. Corvallis insists that the parties agreed to the 50% number, not 49.5%. OMP seeks to introduce testimony by its employees of the trade usage. What are the arguments for each side on whether such testimony should be allowed?
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