Sec. 97. Parol Evidence Rule Permits Contract Partly In Writing And Partly Oral

The parol evidence rule does not prevent a contract from being partly oral and partly in writing if such appears to have been the intention of the parties and if the law does not require the entire contract in question to be in writing.

We have said that the parol evidence rule forbids the alteration of a written contract by any additions thereto by oral proof. But consistently with that we may still have a contract a part of which only was intended to be put in writing, the rest being oral. In such a case the parol evidence rule applies to the part that was put in writing and such part cannot be added to by the introduction of oral testimony, although the other part that the parties intended to be but oral may be proved in connection with the written part. We assume here, of course, that the law does not require the entire contract to be in writing. How do we know whether it was intended to put an entire contract in writing or not? If the defendant says that he wants to prove some additional utterances that were agreed upon at the time qualifying what was said in the writing, why does this not make a case of a contract partly in writing, partly oral? We must look to the contract and the circumstances to answer that. If it appears therefrom as a reasonable conclusion that the writing was meant to be the permanent memorial and evidence of their agreement, or of some particular part thereof, then the con142. Forsyth Mfg. Co. v. Castlen, 112 Ga. 199.

tract, or that part thereof, cannot be added to or contradicted by proof of other things agreed upon at the same time that would change the situation between the parties. In a contract orally made a note may be given. The note, as a note, cannot be changed by parol evidence, but the rest of the agreement can be proved.143 The maker cannot show that it was agreed that the rate of interest should be different from that stated in the note, or that he should have further time than that therein provided. And it is usually not difficult to tell whether the writing is complete so as to permit no further proof.

Sec. 98. Parol Evidence Rule Permits Proof Of Customs

Customs that must have been intended by the parties to govern their contract are a part of it and can be proved to explain the terms of a written contract.

A custom or usage of such general nature that the parties must have contracted in reference to it can be proved to explain the written terms used by them. The parol evidence rule does not forbid such proof because the parties are not by such proof seeking to add to or vary the contract but merely to show in what sense the terms were used.144

Sec. 99. Evidence Not Forbidden By Parol Evidence Rule

A party, notwithstanding the parol evidence rule, may show (1) a subsequent alteration of a written contract by oral agreement; (2) fraud, duress, undue

143- Id.

144. Walls v. Bailey, 49 N. Y. 464.

influence; (3) mistake preventing contract; (4) clerical error in reducing to writing; (5) illegality.

The sole object of the parol evidence rule is to preserve the evidence of the contract which the law required or the parties must be taken to have intended to be the evidence thereof. The rule is a sensible one and is applied in a common sense way. In the following situations oral evidence may be introduced in reference to a written contract for the purposes indicated:

(a) Subsequent alteration of written contract by oral agreement.

Parties to a written agreement may afterwards change it by oral agreement. (By the common law a contract under seal could not be altered except by agreement under seal, but this was not because of the parol evidence rule.)

(b) Oral proof of circumstances rendering contract voidable.

Fraud, duress, undue influence may be shown to avoid a written contract.

Example 62. A by fraudulent representations persuades B to enter into a written contract to buy a farm. B may show the fraud for the purpose of withdrawing from the contract because of the fraud.

(c) Mistake preventing contract.

Referring to the former pages in which this subject was discussed, we may now note, further that such seeming contracts, non-existent because of mistake, may be so shown to be by oral evidence notwithstanding they may have been in writing.

(d) Clerical error in reducing to "writing.

Example 63. A applies to the X Insurance Company for insurance upon his house against the contingency of fire. The agent for the X Company looks over the house and makes a rate upon it, and thereupon A takes out a policy. The house is No. 10 Main Street, but the policy reads 100 Main Street. Upon a proper showing A can recover upon this policy in case of fire.145

(e) Illegality.

A contract legal superficially may be shown to be really intended by the parties thereto to have an illegal purpose and thus defeated.146

(f) That a contract was delivered on condition.

A party to a contract may show by parol evidence that though it was signed and delivered it was subject to an agreement that it should not take effect except upon a condition that did not occur and therefore, that the contract, for example, a note, did not become effective.