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.
It is sometimes said in very general language that extrinsic evidence is always admissible to show contemporaneous oral agreements as to the method of performing a written contract as long as the evidence does not contradict the terms thereof. The application of this rule in its most general form would go a long way toward annulling the parol evidence rule. In certain cases, its operation is clear. The case in which it undoubtedly applies is where the written contract is incomplete on its face. Thus if a contract is on its face incomplete, extrinsic evidence is admissible to show the manner of payment,1 or the character,2 size,3 or quality,4 of material to be furnished, or to show bow and by whom logs sold are to be measured,5 or where railroad ties are to be inspected,6 or to show where a furnace whose erection is contracted for is to be placed.7 So where a furnace is sold under a guaranty that it will save a certain per cent of fuel, extrinsic evidence is admissible to show what kind of test is to be made.8 So if the written contract is incomplete, extrinsic evidence is admissible to show the time of performance,9 as the time of payment.10 If the contract shows that some credit is to be given, evidence is admissible to show for what length of time it was given,11 as the time of paying an agent commissions,12 or the length of time for which the contract is to run,13 as that it is a contract at will.14 So if no time is fixed in the contract for passing title, extrinsic evidence is admissible to show that title is to be retained until the property is paid for.15 If the contract is incomplete, evidence is admissible to show the place of payment.16 In some cases this principle has been applied to notes which did not provide for the place of payment, and extrinsic evidence has been admitted to show an oral agreement fixing the place of payment.17 In other cases it has been held that in the absence of a provision in the note fixing a place of pay* ment, the law would draw inferences as to such place, which inferences could not be contradicted by extrinsic evidence.18 Another class of cases, elsewhere discussed, exists where a consistent collateral contract is entered into between the parties whereby they provide a means for the performance of their written contract. Thus where A gave B his note, an oral agreement whereby B was to collect certain rents belonging to A and apply them on such note was enforceable.19 So where a note under seal was given, the maker was allowed to show that it was not to be paid until another note given therewith had been collected.20 Beyond these classes of cases the courts should not go. It must be admitted, however, that some authorities permit oral terms to be added to a complete written contract, and in some cases even allow the written terms to be contradicted under guise of showing the method of performance. Thus where A had given a note to B, it was held that A could show that A and B had sold to X land owned by A and B, that X had given therefor his note to A, and that the note in litigation, given by A to B and for one half the amount of X's note to A, was to be paid only out of X's note.21 This case, however, is, on this point, contrary to the weight of authority, as such evidence is generally held to contradict the written contract. Where A had bought land from B and had given his note therefor, it was held that A could show that the note was payable only after the land was surveyed and that a reduction in the price was to be made proportional to the deficiency in acreage below the estimated amount.22 This case may be sustained on the theory that a partial failure of consideration was shown. So an oral contract for the payment of a note by sawing lumber has been enforced.23 So a written contract to deliver a quantity of peaches ranging from a maximum to a minimum quantity at vendor's option, to be grown in "sundry orchards " in certain specified county, may be shown by oral evidence to be a contract for the product of certain specific orchards and to be conditioned on the fact of producing a crop on such orchards.24
9 Van Winkle v. Crowell, 146 U. S. 42.
10Hardwick v. McClurg, - Colo. App. -; 65 Pac. 405.
11 Adams v. Turner, 73 Conn. 38; 46 Atl. 247.
1 Block Queensware Co. v. Metz-ger, 70 Ark. 232; 65 S. W. 929. Even if the contract is within the statute of frauds. See v. Butler,
167 Mass. 426; 57 Am. St. Rep. 466; 46 N. E. 52.
2 Whatley v. Reese, 128 Ala. 500; 29 So. 606.
3Meader v. Allen, 110 la. 588; 81 N. W. 799.
4 Aultman v. Clifford, 55 Minn. 159; 43 Am. St. Rep. 478; 56 N. W. 593.
5 Gould v. Excelsior Co., 91 Me. 214; 64 Am. St. Rep. 221; 39 Atl. 554.
6 Havana, etc., Ry. v. Walsh, 85 111. 58.
7 Kumberger v. Spring Co., 158 N. Y. 339; 53 N. E. 3.
8 Hawley, etc., Co. v. Hooper, 90 Md. 390; 45 Atl. 456.
9 Whatley v. Reese, 128 Ala. 500; 29 So. 606; Richter v. Stock Co., 129 Cal. 367; 62 Pac. 39.
10Schaeppi v. Glade, 195 111. 62; 62 N. E. 874.
11 Crowley v. Langdon, 127 Mich. 51; 86 N. W. 391. 119
12 Walters v. King, 119 Cal. 172; 51 Pac. 35.
13 Bankers' Accident Ins. Co. v. Rogers, 73 Minn. 12; 75 N. W. 747.
14 Real Estate Title Co.'s Appeal, 125 Pa. St. 549; 11 Am. St. Rep. 920; 17 Atl. 450.
15 Myers v. Taylor, 107 Tenn. 364; 64 S. W. 719.
16Ebert v. Arends, 190 111. 221; 60 N. E. 211.
17 Cox v. Bank, 100 U. S. 704; Blackerly v. Ins. Co., 83 Ky. 574.
8 Moore v. Davidson, 18 Ala. 209.
19 Stebbins v. Lardner, 2 S. D. 127; 48 N. W. 847.
20Quin v. Sexton, 125 N. C. 447; 34 S. E. 542.
21 Quin v. Sexton, 125 N. C. 447; 34 S. E. 542.
22McGee v. Craven, 106 N. C. 351; 11 S.E. 375.
23 Ramsay v. Capshaw, 71 Ark. 408; 75 S. W. 479.
24 Ontario, etc., Association v. Cutting. 134 Cal. 21; 86 Am. St. Rep. 231; 53 L. R. A. 681; 66 Pac. 28.