Contract interpretation—the parol evidence rule

Published by a ��Ƶ Dispute Resolution expert

Practice notes

Contract interpretation—the parol evidence rule

Published by a ��Ƶ Dispute Resolution expert

Practice notes

In addition to the guiding principles on Contract interpretation provided by Lord Hoffmann in ICS (see Practice Note: Contract interpretation—the guiding principles), further Rules have been developed as aids to contract interpretation. The starting point is the parol evidence rule, which restricts the Admissibility of extrinsic evidence as a means of adding to, varying or contradicting a written agreement.

For related guidance on issues of admissibility, see Practice Notes:

•
Contract interpretation—admissibility of surrounding documents
•
Contract interpretation—admissibility of pre-contractual negotiations and statements

Parol evidence rule—what is it?

The parol evidence rule provides that, where parties have a signed agreement, it is not generally permissible to adduce extrinsic evidence to:

•
show what the parties’ intention was in entering that agreement (Prenn v Simmonds)
•
contradict, vary or add to the terms of the written agreement—this extends to implied terms (Jacobs v Batavia)

The parol evidence rule only applies in respect of written contracts.

The parol evidence rule operates to exclude not only oral evidence, but all forms of evidence outside

Jurisdiction(s):

United Kingdom

Key definition:

Contract definition

What does Contract mean?

A contract is a legally binding promise (oral or in writing) by one person to fulfil an obligation to another person in return for consideration. A binding contract comprises four elements: offer, acceptance, consideration and intention to create legal relations.

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