This section is from the book "The Law Of Contracts", by William Herbert Page. Also available from Amazon: Commercial Contracts: A Practical Guide to Deals, Contracts, Agreements and Promises.
If the parties to a contract have reduced it to writing, they must intend such writing to be the repository of their common intention. It merges all prior and contemporaneous negotiations.1 Accordingly, a contract in writing complete on its face, cannot be contradicted by extrinsic evidence,2 nor can prior or contemporaneous parol agreements be used to contradict the written contract,3 so as to substitute for the intention therein expressed, that expressed in such oral agreements.4 To violate this rule and to admit extrinsic evidence of the intention of the parties direct for the purpose of displacing their intention as shown in the written contract, is "to substitute the inferior for the superior degree evidence - conjecture for fact - presumption for the highest degree of legal authority - loose recollection and uncertainty of memory for the most sure and faithful memorials which human ingenuity can devise or the law adopt.5 In an early Massachusetts case, the court after observing that it was "remarkable that so considerable a degree of obscurity should remain at this day  upon a branch of the law of evidence so constant in its recurrence in courts of law," said, "When parties have deliberately put their engagements in writing, in such terms as impart a legal obligation, without any uncertainty as to the object or extent of such obligation, it shall be presumed that the whole engagement of the parties, and the extent and manner of their undertaking, was reduced to writing; so that oral testimony of a previous colloquium between the parties, or of conversation or declarations at the time when it was completed or afterwards, would tend in many instances to substitute a new and different contract for the one which was really agreed upon, to the prejudice, possibly, of one of the parties."6 The parol evidence rule applies to suits on contracts in equity, as well as to actions at law.7 This rule is often stated inaccurately in some such form as this: extrinsic evidence is inadmissible to contradict or vary the terms of a written contract.8 As we shall see hereafter,9 extrinsic evidence is often admissible to vary the contract, in the sense that the contract in connection with the admissible evidence has a different meaning from that which it would have had but for such evidence. The evidence forbidden by the rule is not extrinsic evidence in general, but extrinsic evidence of the intention direct of the parties to the contract, introduced to displace the intention set forth in the written contract.
1 McElveen v. Ky., 109 Ga. 249; 77 Am. St. Rep. 371; 34 S. E. 281; Gray v. Phillips, 88 Ga. 199; 14 S. E. 205; Walters v. Ward, 153 Ind. 578; 55 N. E. 735; McCrary v. Bank, 97 Term. 469; 37 S. W. 543.
2 Pike v. Mcintosh, 167 Mass. 309; 45 N. E. 749; Doyle v. Dixon, 12 All. (Mass.) 576; Hall's Appeal, 60 Pa. St. 458; 100 Am. Dec. 584; Gilbert v. Stockman, 76 Wis. 62; 20 Am. St. Rep. 23; 44 N. W. 845.
3 "A written contract cannot be varied or contradicted by a prior or contemporaneous parol agreement between the parties." Gar-neau v. Cohn, 61 Neb. 500, 501; 85 N. W. 531 (citing among other cases Sylvester v. Paper Co., 55 Neb. 621; 75 N. W. 1092; Commercial State Bank v. Antelope County, 48 Neb. 496; 67 N. W. 465; Quinn v. Moss, 45 Neb. 614; 63 N. W. 931; Gerner v. Church, 43 Neb. 690; 62 N. W. 51.)
4 Davis v. Robert, 89 Ala. 402; 18 Am. St. Rep. 126; 8 So. 114; Martin v. Ry., 48 W. Va. 542; 37 S. E. 563.
5 Baugh v. Ramsey, 4 T. B. Mon. (Ky.) 155, 157.
6 Stackpole v. Arnold, 11 Mass. 27, 30.
7 "It is a common error to suppose that these are rigid principles of law, the severity of which will be mitigated by a court of equity, and that the party who feels their operation has nothing to do but to change his ground and get into the climate of the chancellor to meet with different treatment. This, however, will be found a vain and fruitless escape." Baugh v. Ramsey, 4 T. B. Mon. (Ky.) 155, 157.
8 Its positive terms, being expressed in writing, cannot be contradicted or varied by parol evidence." Walker v. Price, 62 Kan. 327, 333; 84 Am. St. Rep. 392; 62 Pac. 1001; citing Willard v. Ostrander, 46 Kan. 591; 26 Pac. 1017; Rodgers v. Perrault, 41 Kan. 385; 21 Pac. 287.
9 See Sec. 1216 et seq.