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Contents

The Parol Evidence Rule ........................................................................................................................ 2 What is the parol evidence rule? To what extent is a signed contractual document conclusive? ....... 2 Entire Agreement Clauses....................................................................................................................... 5 Exceptions to the Parol Evidence Rule ................................................................................................... 6 Utility of the Parol Evidence Rule: Should it be Abolished?.................................................................. 7 Case Law ................................................................................................................................................. 8 To What Extent is a Signed Contractual Document Conclusive?......................................................... 12 Exceptions to the Parol Evidence Rule ............................................................................................. 12 Misrepresentation Exception ............................................................................................................ 14 Evidence to Show that the Written Document Did Not Encompass the Entire Agreement. ............ 16 Conclusion ............................................................................................................................................ 17 Bibliography .......................................................................................................................................... 19 Primary Sources ................................................................................................................................ 19 Bauer v. The Bank of Montreal, [1980] 2 SCR. ................................................................................... 19 Ellis v. Abel (1884), 10 O.A.R. 226 (C.A). ...................................................................................... 19 Secondary Sources ............................................................................................................................ 20

The Parol Evidence Rule


What is the parol evidence rule? To what extent is a signed contractual document conclusive?
Contacts are legally binding agreements made between parties. The basic elements of a contract are the offer, acceptance and the furnishing of consideration. Contract law is concerned with regulating contracts. Contract law determines what can be contracted for, when a contract will be enforced and how a contract must be interpreted. Sometimes disputes in contract law centre around addressed what exactly was agreed upon between the parties. Issues of certainty may need to be. This paper will discuss the parol evidence rule and the extent to which a signed written contractual document is conclusive. The parol evidence rule is an aspect of substantive law. It is not expressly a rule of evidence in itself. It applies only where a contract has been made into writing.
When two parties have made a contract and have expressed it in a writing to which they have both assented as the complete and accurate integration of that contract, evidence, whether parol or otherwise, of antecedent understandings and negotiations will not be admitted for the purpose of varying or contradicting the writing.1

The aim of the parol evidence rule is to encourage certainty and clarity regarding written contracts. This is a good purpose; as if the contract has been written then everything that the parties had agreed to should be included within the writing. The parole evidence rule is a common law principle that where two parties have agreed to a written contract which provides that the contract embodies their entire agreement, outside evidence cannot be admitted to vary, contradict or add to the contract. Therefore, where the words of the contract are clear and unambiguous, then no extrinsic parole evidence may be admitted to assist in the contractual interpretation.2

Arthur Corbin, "The Parol Evidence Rule" (1944) 53 Yale L.J. 603at 603. Gervas W. Wall and Nicholas Whalen, "The Boilerplate: What does it Accomplish?" (2001) online: Deeth Williams Wall LLP <http://www.dww.com/?page_id=1025>.
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The parole evidence rule provides that evidence extrinsic to the written contract will not be allowed to be used in order to vary, subtract from, add to or contradict the written contractual agreement. 3 The main intension behind the rule is to maintain the integrity of written contracts. The idea behind
the rule is that negotiations, previously drafted contracts made prior to the formation of the actual contractual document as well as any other extrinsic evidence would lead to uncertainty of the contractual document. Such pre contractual dealings do not promote certainty.
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However the parole evidence rule does not operate absolutely and it does have some exceptions:
One class of exceptions arises to affirm a collateral contract, where objective evidence supports the finding that the written document did not constitute the whole agreement x. A second type of exception exists to help divine the true intent of the parties in the face of ambiguous drafting. The third common law exception allows parole evidence to establish that a condition precedent has been fulfilled xi. Statutory exceptions may allow parole evidence for proof of unfair business practices.5 Other exceptions to the rule include [t]o show fraud, duress, mistake, unconscionability, or illegal purpose on the part of one or both parties; To show that consideration has not actually been paid; and, To identify the parties, especially if the parties have changed names. 6

The term parol means oral. So the phrase parol evidence rule is a slight misnomer. The rule applies to all forms of evidence that are extrinsic to the written contract, whether they are oral or written. Another comment about the name of the rule being a misnomer is that it is not truly a rule of evidence. The rule is actually one of substantive law. The rule does have evidentiary consequences in that it makes evidence of such extrinsic statements irrelevant

Gervas W. Wall and Nicholas Whalen, "The Boilerplate: What does it Accomplish?" (2001) online: Deeth Williams Wall LLP <http://www.dww.com/?page_id=1025>. 4 James Klots, Modification to the Parol Evidence Rule by the UN Convention on Contracts for the International Sale of Goods (CISG) (2009) online: American Bar Association <http://apps.americanbar.org/intlaw/fall09/materials/Pribetic_Antonin%20I._25_AP1030103025_CLEMaterials _sysID_1508_690_0.pdf> at 1. 5 Gervas W. Wall and Nicholas Whalen, "The Boilerplate: What does it Accomplish?" (2001) online: Deeth Williams Wall LLP <http://www.dww.com/?page_id=1025>. 6 James Klots, Modification to the Parol Evidence Rule by the UN Convention on Contracts for the International Sale of Goods (CISG) (2009) online: American Bar Association <http://apps.americanbar.org/intlaw/fall09/materials/Pribetic_Antonin%20I._25_AP1030103025_CLEMaterials _sysID_1508_690_0.pdf> at 2.

and for that reason inadmissible, but this does not make it a rule of evidence. 7 By preventing certain information or testimony from being relevant the rule prevents this information or testimony from being heard by the court. For evidence to be admissible it must be prima facie relevant to a fact in issue. The parol evidence rule prevents evidence extrinsic to the written contractual document from being relevant, and because the evidence is not relevant, it is inadmissible. Why is extrinsic information irrelevant? When a dispute in contract law occurs it is a matter of what are the parties obligations. That is what did the parties really agree to, or what did they bargain for? Evidence is relevant if it has a tendency to prove a fact in issue. Therefore evidence must be relevant to a fact in issue. That is, evidence is relevant where it is possible that the evidence may show that a fact in issue is more or less likely. The rule is, in effect, that extrinsic statements and promises do not affect the parties' obligations. This is a rule of substantive law.8 Since the rule actually speaks to the parties obligations and it is actually the parties obligations which would be contested in court then the extrinsic evidence would be irrelevant under the application of the parol evidence rule because the rule holds that the extrinsic statements do not actually affect the parties obligations.

It is important to note that legal contracts may be formed verbally. However, the parol evidence rule only applied to contracts which have been wholly reduced to writing. Therefore the parol evidence rule would not apply to contracts that are entered into verbally. Again the rule serves to promote certainty of written documents. It should be noted that this is not a rule that signature is absolutely binding. It has nothing directly to do with signature. For example, it applies if parties orally agree that an unsigned document will be the exclusive

7 8

S.M. Waddams, Do We Need a Parol Evidence Rule? (1991) 19 Can. Bus. L.J. 385 at 387. S.M. Waddams, Do We Need a Parol Evidence Rule? (1991) 19 Can. Bus. L.J. 385 at 385.

record of their agreement. 9 Even if the parties orally agree than the unsigned document is the entirety of their agreement, this does not mean that the contract is a verbal one.

Entire Agreement Clauses


The rule is not that written documents can never be disputed. A rule that signature is absolutely binding never has been part of the law of contracts, and could not, it is submitted, be defended.10 An important aspect of the rule is its evidentiary consequence. However, it is useful to note that the rule only comes into effect where it is determined that the parties intended for the written contractual document to encompass the entirety of their agreement. The rule as stated above cannot exclude evidence designed to show that the contract has not been
wholly "reduced to writing" because that is a precondition of the operation of the rule itself.11 This

is the case, even where there exists within the contract a clause stipulating that the written contract embodies the parties entire agreement. Such a clause is known as an entire agreement clause. Although some difficulty may arise where an entire agreement clause is used, this is only a difficulty and the usage of the entire agreement will not on its own prevent an exception from applying. The aim of the parol evidence rule is to give legal force to the parties intensions. Given this, the rule as stated above cannot exclude evidence designed to show that the contract has not been wholly "reduced to writing" because that is a precondition of the operation of the rule itself.12 Here it can be seen that the rule is not that the contents of a written contract are indisputable. The rule is that if the parties upon agreement to the terms of the contract, intended for the written document to prevail, then the written document,

S.M. Waddams, Do We Need a Parol Evidence Rule? (1991) 19 Can. Bus. L.J. 385 at 387. S.M. Waddams, Do We Need a Parol Evidence Rule? (1991) 19 Can. Bus. L.J. 385 at 387. 11 S.M. Waddams, Do We Need a Parol Evidence Rule? (1991) 19 Can. Bus. L.J. 385 at 388. 12 S.M. Waddams, Do We Need a Parol Evidence Rule? (1991) 19 Can. Bus. L.J. 385 at 387.
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under the parol evidence rule will prevail. 13 The rule, so stated, only comes into operation when the court is satisfied of the parties' intention, and consequently all relevant evidence must be admissible to show what the intention was.14 Even the presence of a signature will not make the written contract irrefutable. Although the presence of signatures will create a strong presumption that the parties intended for the writing to encompass the entirety of their agreement.

What this means is that the court must first determine that the contractual parties intended that the writing encompass their entire agreement. Therefore a finding of intension as such is a condition of the application of the parol evidence rule. Since the court must determine intensions, the rule cannot be used to bar evidence of the intensions of the parties as to whether they had purposed that the written contact embody their entire agreement. Therefore evidence of intention in such regards is not rendered irrelevant by the parol evidence rule and the court should hear it. Therefore the rule only comes into play after the court has ascertained the parties intentions and determined that those intentions were for the written contract to encompass the entirety of the agreement.

Exceptions to the Parol Evidence Rule


An important exception to the parol evidence rule is that of mistake. Where there was a mistake made by a party and this mistake was relied upon to enter into the contract, it is possible that the parol evidence rule may not apply. The point, stated here in terms of contract formation, may also be framed in terms of mistake: the signer's mistake as to the terms of a document is a defence if the other party had reason to know of it.15

13 14

S.M. Waddams, Do We Need a Parol Evidence Rule? (1991) 19 Can. Bus. L.J. 385 at 387. S.M. Waddams, Do We Need a Parol Evidence Rule? (1991) 19 Can. Bus. L.J. 385 at 387. 15 S.M. Waddams, Do We Need a Parol Evidence Rule? (1991) 19 Can. Bus. L.J. 385 at 386.

Utility of the Parol Evidence Rule: Should it be Abolished?


The parol evidence rule has been extensively criticised. Main criticisms are rooted in the fact that the rule is not absolute. However, it has already been shown that a rule holding written contracts as absolute would be unfair. While it is true that greater certainty is to be desired, this must be balanced with the objective of fairness. It is important to note that while the parol evidence rule does have a fair number of exceptions, these exceptions are designed to promote fairness. The case for abolition of the parol evidence rule is that it is said by critics to be internally incoherent, becauseit cannot operate as an absolute exclusion of extrinsic evidence, that it is so riddled with exceptions that it is in practice always capable of evasion.16 While the criticisms are true that the rule cannot absolutely excuse all extrinsic evidence, such exclusions would be unfair. The rule is but a strong presumption. In order for the rule to exclude all extrinsic evidence, it would have to stipulate that all written contracts are indisputable documents. A situation such as this would be unfair and produce unreasonable results. The parol evidence rule does contribute to certainty; however, it balances this with fairness. The rulecannot reasonably be expected to, exclude all extrinsic evidence in every dispute. Only a rule that signed documents are sacrosanct could do that, and as I have sought to show, that is not the same as the parol evidence rule.17

It is because of the fact that it would be unfair to hold written contracts as indisputable that the parol evidence rule has so many exceptions. It is important to note that while the parol evidence rule does not make written contracts irrefutable, it also does not create a

16 17

S.M. Waddams, Do We Need a Parol Evidence Rule? (1991) 19 Can. Bus. L.J. 385 at 392. S.M. Waddams, Do We Need a Parol Evidence Rule? (1991) 19 Can. Bus. L.J. 385 at 392.

situation of uncertainty in which no written contractual document will be held out as the entirety of the agreement between the parties.

Case Law
The parole evidence rule is a common law substantive principle. It is useful to consider how the rule has been utilised within the case law. The cases of Hawrish v. Bank of Montreal18 and Gallen v. Butterley19 are useful common law interpretations of the parol evidence rule. In the case of Hawrish20 the appellant, Hawrish was a solicitor who has guaranteed a loan with the Bank of Montreal. Hawrish acted as a personal guarantor for a company for debts of up to $6000.00. In doing so, he assumed liability for a company formed for the purpose of buying the assets of a second company. However, he claimed he had only done so after being assured by the Banks manager that he would be released from the guarantee if other guarantors were obtained from the companys directors. Furthermore, Hawrish contended that the bank manager had promised that the guarantee was a limited one and that it was to cover only existing indebtedness. Two more guarantors were obtained by the bank in the form of the companys directors, however, Hawrishs initial guarantee was not discharged and the company for which Hawrish had become guarantor defaulted. The bank then brought action against Hawrish for the full amount of the guarantee. The guarantee document that Hawrish signed was the same as the banks usual guarantee documents. There was nothing in the guarantee document that suggested that it was of a limited duration or that Hawrish would be discharged if two more guarantors wore presented. Hawrish attempted to defend against the banks action by tendering evidence of the oral promise made to him by

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Hawrish v. Bank of Montreal, [1969]S.C.R. Gallen v. Butterley, 9 DLR (4th) 496 (BCCA, 1984). 20 Hawrish v. Bank of Montreal, [1969]S.C.R.

the bank manager that he would be discharged if two new guarantees were given by the companys directors. It was held by the Supreme Court that the parol evidence rule would bar Hawrish from presenting evidence of the verbal assurances made to him by the banks manager. The court determined that such statements could not be admitted because they contradicted the very substance of the written contract. That is, that it was a continuing guarantee and that it was not of a limited nature as Hawrish had wished to prove by parole evidence. Hawrish had tried to argue that the oral evidence should have been admitted and that instead of the verbal evidence being contradictory of the written contract, it rather simply presented a means for which the contract may be concluded i.e. that the guarantee was of a limited duration. The appellants argument failed on the ground that the collateral agreement allowing for the discharge of the guarantee could not stand as it clearly contradicted the terms of the guarantee bond which stated that it was a continuing guarantee. What is important to note here is that a key purpose of the parol evidence rule is to ensure that the parties intensions for the contract are given effect. Therefore parol evidence cannot be admitted where that evidence directly contradicts with the written contract. Here in Hawrish, the argument that there was a collateral agreement could not be allowed. This was because the collateral agreement and the written agreement were contradicted each other. This would therefore mean that there were two conflicting contracts. How could it be that two contracting parties would agree to two contracts that entirely contradicted each other? Therefore, the court could not accept Hawrishs evidence of the collateral agreement made with the banks manager.

Another important case of parol evidence rule interpretation is Gallen v. Butterley21. In that case, farmers had been given verbal assurances that the buckwheat would smother weeds. The farmers then signed a contract with a company called Allstate. The signed contract stated that the sellers provided no warranty pertaining to the seed sold...and will not in any way be responsible for the crop. However, the buckwheat that the farmers planted did not as a weed control as they had been verbally assured and the crops were smothered and destroyed. The British Columbia Court of Appeal held in this case that one could introduce parol evidence to prove that a collateral agreement had existed, provided that the evidence does not contradict the written agreement . This was found to be so, as the court found that it could not be that the parties would agree to two separate contracts which disagreed with each other. The court in Gallen v. Butterley took the time to restate the parol evidence rule.
The rule of evidence may be stated in this way: Subject to certain exceptions, when the parties to an agreement have apparently set down all its terms in a document, extrinsic evidence is not admissible to add to, subtract from, vary or contradict those terms.22

To come to its decision in Gallen v. Butterley, the court asked if there was a contradiction between the oral representation and the signed document. This requires an assessment and comparison of the statements made by Allstate as well as the written document. The assurance made by Allstate was that the weeds would not cause loss of crop and that the buckwheat would grow up and smother the weeds. The defendants were depending specifically upon clause # 23 of the written document to exclude the verbal assurance as been contradictory. Clause # 23 read, [a]ll state gives no warranty as to the productiveness or any other matter pertaining to the seed sold to the producer and will not in any way be responsible for the crop.23

21 22

Gallen v. Butterley, 9 DLR (4th) 496 (BCCA, 1984) Gallen v. Butterley, 9 DLR (4th) 496 (BCCA, 1984) para. 34. 23 Gallen v. Butterley, 9 DLR (4th) 496 (BCCA, 1984) para. 29.

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This is very important, as the judge ruled that the oral representation did not contradict with the written contract. This was because, the written contract pertained specifically to the seed, and the yield of the seed. The verbal assurances were promises pertaining to weeds. The problem the farmers had was neither the seed nor its yield; the issue lay with the weeds. Therefore Hawrish24 and Gallen25 may be distinguished upon the basis that in the former, the court found that the verbal assurance and the written document were inconsistent. Therefore the court, in its endeavour to decipher the intentions of the contracting parties, determined that the parties could not have agreed to two contracts that contradicted each other. It was one or the other and in Hawrish, it was the written document that was deemed to be the conclusive agreement between Hawrish and the bank. The contrary was determined in Gallen.26 In that case, the court determined that the parties intentions as expressed in the written document, did not contradict the assurances tendered prior to the signing of the written contract. Therefore the parol evidence was deemed admissible in that case. The court held that the oral warranty and the printed document did not contradict each other. The clause # 23 of the written agreement did not exclude other warranties. Further, the court found that the clause #23 excluded specifically all warranties pertaining to the seed and that Allstate was not responsible for the crop or the yield.27 This is very important as the court determined that the written contract and the verbal assurances were not contradictory. This was because the excluding clause # 23 was deemed by the court to pertain specifically to the seed, and the yield of the seed. The verbal assurances rather, were promises pertaining to the weeds. The problem the farmers had was neither the seed, nor its yield. Their issues lay with the weeds.

24 25

Hawrish v. Bank of Montreal, [1969]S.C.R. Gallen v. Butterley, 9 DLR (4th) 496 (BCCA, 1984). 26 Gallen v. Butterley, 9 DLR (4th) 496 (BCCA, 1984). 27 Gallen v. Butterley, 9 DLR (4th) 496 (BCCA, 1984). Para 61.

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To What Extent is a Signed Contractual Document Conclusive?


The answer to this question according to the parole evidence rule is that barring any exceptions, extrinsic evidence of pre contractual dealings (verbal or otherwise), will not be admissible to contract or add or subtract to the written contract. It is important to note that every use of extrinsic evidence to some degree contradicts the written document. This can be seen prima facie as there would be no dispute if the written document was not being contested.
There is clearly a danger that a court which too readily admits evidence of a parol agreement whose terms are not reflected in the written agreement between the parties might thereby afford one of the parties an easy way out of avoiding the provisions of the written agreement. 28 This is a danger which the court must take seriously.

Concerning the parol evidence rule, it is important that a workable compromise be arrived at. A reasonable compromise might be to regard the parol evidence rule as importing a strong presumption that, in certain circumstances, written agreement cannot be added to or varied by parol, but not as a rigid or inflexible rule. The presumption may be overridden in appropriate circumstances.29 A collateral contract or agreement is one where the actual consideration of the agreement is entry into another contract. It is an agreement made to induce the creation of a secondary agreement. For example, verbal statements made to induce a party to sign a written contract, could be construed as a collateral agreement. In order for a collateral agreement to be admissible the court must determine that the written contract was not the definite and complete statement of the agreement between the parties.30

Exceptions to the Parol Evidence Rule

28 29

Arnie Herschorn, "The Parol Evidence Rule" (1998) 20 Advoc. Q. 176 at 176. Arnie Herschorn, "The Parol Evidence Rule" (1998) 20 Advoc. Q. 176 at 176. 30 Arnie Herschorn, "The Parol Evidence Rule" (1998) 20 Advoc. Q. 176 at 177.

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The case of Ellis V. Abell31 is illustrative of some of the exceptions to the parol evidence rule.

Exceptions: 1. Fraud, illegality or want of capacity32 2. The existence of any separate oral agreement constituting a condition precedent to the attaching of any obligation under the contract33 3. The existence of any distinct subsequent oral agreement to rescind or modify the contract, provided that the oral agreement is not invalid under the Statute of Frauds or otherwise34 4. Any usage or custom by which incidents not expressly mentioned in the contract are annexed to contracts of that description, unless the annexing of the incident to the contract would be repugnant to or inconsistent with the express terms of the contract, and35 5. The existence of a separate oral agreement as to any matter on which a document is silent and which is not inconsistent with its terms if, from the circumstances of the case, the court infers that the parties did not intend the document to be a complete and final statement of the whole transaction between them.36 It is important to note that the above exceptions are actually geared towards the court determining whether or not the written contract was intended to be the complete and final statement of the whole transaction between them.37 Is there a circumstance in which the parol evidence rule ought to operate as an absolute exclusionary rule?38 The court may apply the rule rigidly in cases where there is an inconsistency between a term of the written agreement and the parol agreement which it is alleged was part of the overall agreement between the parties.39 The answer regarding the finality of written contracts documents is that there is no hard rule as to when a written

31 32

Ellis v. Abel (1884), 10 O.A.R. 226 (C.A) 247. Arnie Herschorn, "The Parol Evidence Rule" (1998) 20 Advoc. Q. 176 at 177. 33 Arnie Herschorn, "The Parol Evidence Rule" (1998) 20 Advoc. Q. 176 at 177. 34 Arnie Herschorn, "The Parol Evidence Rule" (1998) 20 Advoc. Q. 176 at 177. 35 Arnie Herschorn, "The Parol Evidence Rule" (1998) 20 Advoc. Q. 176 at 177. 36 Arnie Herschorn, "The Parol Evidence Rule" (1998) 20 Advoc. Q. 176 at 177. 37 Arnie Herschorn, "The Parol Evidence Rule" (1998) 20 Advoc. Q. 176 at 178. 38 Arnie Herschorn, "The Parol Evidence Rule" (1998) 20 Advoc. Q. 176 at 178. 39 Arnie Herschorn, "The Parol Evidence Rule" (1998) 20 Advoc. Q. 176 at 178.

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contract will be deemed conclusive. The parol evidence rule is best regarded only as importing a presumption, rather than as a rigid exclusionary rule.40 The case of Hawrish, previously referred to in this paper has been used as an authority for the proposition that the parol evidence rule is an absolute exclusionary rule.41 Hawrish appears to stand for the proposition that the court will not allow parol evidence of a collateral agreement to prevail where the collateral agreement is inconsistent with the terms of the written agreement. There is the important general proposition that a contract induced by misrepresentation or by an oral representation inconsistent with the form of the written contract would not stand and could not bind the party to whom the representation had been made.42 It is therefore important to note that [i]f the defence of misrepresentation is available to a party, then evidence may be introduced to establish that there was a misrepresentation.43

Misrepresentation Exception
The case of Bauer44 is illustrative of the requirements for a successful defence based upon misrepresentation and the parol evidence rule. In Bauer,45 Justice Mcintyre stated:
To succeed, however, this argument must rest upon a finding of some misrepresentation by the bank, innocent or not, or on some oral representation inconsistent with the written document which caused a misimpression in the guarantors mind, or upon some omission on the part of the bank manager to explain the contents of the document which induced the guarantor to enter into the guarantee upon a misunderstanding as to its nature.46

40 41

Arnie Herschorn, "The Parol Evidence Rule" (1998) 20 Advoc. Q. 176 at 178. Arnie Herschorn, "The Parol Evidence Rule" (1998) 20 Advoc. Q. 176 at 178. 42 Arnie Herschorn, "The Parol Evidence Rule" (1998) 20 Advoc. Q. 176 at 180. 43 Arnie Herschorn, "The Parol Evidence Rule" (1998) 20 Advoc. Q. 176 at 180.
44 45

Bauer v. The Bank of Montreal, [1980] 2 S.C.R. 102. Bauer v. The Bank of Montreal, [1980] 2 S.C.R. 102 . 46 Bauer v. The Bank of Montreal, [1980] 2 SCR 102 at 111.

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The point of law so stated in Bauer is that where a party seeks to rely upon evidence of misrepresentation as an exception to the parol evidence rule, such misrepresentation need not be dishonest. There must be some misrepresentation which is inconsistent with the written contract and that misrepresentation must have created an incorrect impression in the mind of the party seeking to rely upon the misrepresentation. It can also be that there existed an omission so serious that the omission/misrepresentation was relied upon and so caused the relevant party to enter into he written contract.47 Therefore [i]f the defence of misrepresentation is available, then parol evidence of the misrepresentation may sometimes prevail even where there is an inconsistency with the written agreement.48 If the defence of misrepresentation is available, then parol evidence of the misrepresentation may sometimes prevail even where there is an inconsistency with the written agreement.49 It may be useful however to briefly outline the difference between a collateral agreement and a misrepresentation. This may be useful in determining whether a particular piece of evidence may be used to show a misrepresentation or a collateral agreement.50 An agreement is based on a promise whereas a representation is based on a statement of existing fact or present intension so the fact situations which support the defences of collateral agreement and misrepresentation respectively do not coincide.51 In concluding as regards when the parboil evidence rule may operate absolutely to exclude extrinsic evidence, any absolute exclusionary rule appears still to be confined only to parol evidence of a collateral agreement whose terms are inconsistent with the written contract...52 Where the parol evidence establishes that a promise was made, it is likely that the parol evidence is sought to

47 48 49

Bauer v. The Bank of Montreal, [1980] 2 SCR 102 at 111.

Arnie Herschorn, "The Parol Evidence Rule" (1998) 20 Advoc. Q. 176 at 181. Arnie Herschorn, "The Parol Evidence Rule" (1998) 20 Advoc. Q. 176 at 181. 50 Arnie Herschorn, "The Parol Evidence Rule" (1998) 20 Advoc. Q. 176 at 181. 51 Arnie Herschorn, "The Parol Evidence Rule" (1998) 20 Advoc. Q. 176 at 181-182. 52 Arnie Herschorn, "The Parol Evidence Rule" (1998) 20 Advoc. Q. 176 at 182.

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adduce a collateral agreement. 53 Whereas where the parol evidence establishes the existence of...a statement of existing fact or present intension54 then it is likely that the parol evidence will be seen to be sought to establish a misrepresentation. Therefore it is important to note that the misrepresentation defence will not apply to all factual instances.55 This is because the parol evidence may serve to establish the existence of a promise rather than a statement of existing fact or present intention.56

Evidence to Show that the Written Document Did Not Encompass the Entire Agreement.
As stated before the parol evidence les main focus is to ensure that the parties intentions regarding whether the written document is to encompass the entirety of the agreement. Further, evidence to show that this is not the case is highly relevant to ascertaining the parties intensions and therefore should be heard. The parol evidence rule is not an absolute, inflexible rule, although it does create a very strong presumption.57 Generally, courts will not seek to apply the parol evidence rule as an absolutely exclusionary rule as the court cannot allow the rule to be used so as to cause obvious injustice by providing a tool for one party to dupe another.58 While the parole evidence rule is not deemed to be an absolute exclusionary rule and at best is considered to operate as a strong presumption that presumption may have a greater or lesser effect in particular circumstances. The presumption is weaker where the specific oral representation alleged is inconsistent with a general exemption or exclusion clause which

53 54

Arnie Herschorn, "The Parol Evidence Rule" (1998) 20 Advoc. Q. 176 at 182. Arnie Herschorn, "The Parol Evidence Rule" (1998) 20 Advoc. Q. 176 at 182. 55 Arnie Herschorn, "The Parol Evidence Rule" (1998) 20 Advoc. Q. 176 at 182. 56 Arnie Herschorn, "The Parol Evidence Rule" (1998) 20 Advoc. Q. 176 at 182. 57 Arnie Herschorn, "The Parol Evidence Rule" (1998) 20 Advoc. Q. 176 at 183. 58 Arnie Herschorn, "The Parol Evidence Rule" (1998) 20 Advoc. Q. 176 at 183.

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purports to exclude liability for any oral representation...59 On the converse, the presumption is stronger where the specific oral representation alleged is inconsistent with an equally specific provision of the written agreement.60 Regarding evidence that speaks to whether the parties intended for the written agreement to encompass the entire agreement, such evidence will remain relevant. However this is so only where this extrinsic evidence speaks to such an intention.

Conclusion
The parol evidence rule is a common law substantive rule with evidentiary consequences. This paper has discussed the parol evidence rule and the extent to which a written contract is conclusive. Cases such as Hawrish61 propose that evidence showing the existence of a collateral agreement will be barred by the parol evidence rule where the collateral agreement is inconsistent with the written contract. Hawrish lays down a rule which is not rigid but which creates a strong presumption.62 On the converse, the case of Gallen v. Butterley63 lays down the principle that where the collateral agreement is not inconsistent with the written contract, then parol evidence of the collateral agreement may be admissible. In all cases the court must attempt to adduce what the true intentions were of the parties that entered into the written agreement. It is important that the parol evidence rule is not used as a means of creating injustice. In conclusion whereas it is difficult to even express the parol evidence rule in a manner which denotes where it will apply to a case and renders the written document conclusive; basic expression of this is that barring its acknowledged exceptions the parol evidence rule will bar evidence of extrinsic agreements or representations.
59 60

Arnie Herschorn, "The Parol Evidence Rule" (1998) 20 Advoc. Q. 176 at 186. Arnie Herschorn, "The Parol Evidence Rule" (1998) 20 Advoc. Q. 176 at 187. 61 Hawrish v. Bank of Montreal, [1969]S.C.R. 62 Arnie Herschorn, "The Parol Evidence Rule" (1998) 20 Advoc. Q. 176 at 191. 63 Gallen v. Butterley, 9 DLR (4th) 496 (BCCA, 1984).

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Bibliography
Primary Sources
Hawrish v. Bank of Montreal, [1969]S.C.R. Gallen v. Butterley, 9 DLR (4th) 496 (BCCA, 1984) Bauer v. The Bank of Montreal, [1980] 2 SCR. Ellis v. Abel (1884), 10 O.A.R. 226 (C.A).

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Secondary Sources
Arthur Corbin, "The Parol Evidence Rule" (1944) 53 Yale L.J. 603. Gervas W. Wall and Nicholas Whalen, "The Boilerplate: What does it Accomplish?" (2001) online: Deeth Williams Wall LLP <http://www.dww.com/?page_id=1025>. James Klots, Modification to the Parol Evidence Rule by the UN Convention on Contracts for the International Sale of Goods (CISG) (2009) online: American Bar Association <http://apps.americanbar.org/intlaw/fall09/materials/Pribetic_Antonin%20I._25_AP1030103025_CLEMaterial s_sysID_1508_690_0.pdf>. S.M. Waddams, Do We Need a Parol Evidence Rule? (1991) 19 Can. Bus. L.J. 385 at. Arnie Herschorn, "The Parol Evidence Rule" (1998) 20 Advoc. Q. 176.

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