By the Business Attorneys at Garg & Associates, PC, serving The Woodlands, Spring, Houston, Conroe, Humble, Kingwood, Tomball, Cypress, Huntsville, Westchase, Southwest, Sugar Land, West Oaks, Alief, Memorial, River Oaks, Stafford, Katy, and Missouri City.

What is the “parole evidence rule” and how does it work?

The parole evidence rule prohibits any consideration of evidence outside of the contract itself that could be used to contradict, alter, or add to the terms of an unambiguous written agreement unless there is proven fraud, mistake or accident. The parole evidence rule keeps a party from trying to “rewrite” the terms of an unambiguous contract by testifying what the parties “meant to agree upon.” If the contract is unambiguous on its face, there is no need for additional evidence to prove the intent of the parties, the “four corners” of the document speak to what the parties “meant.” However, if the contract is ambiguous on its face, that is, if the terms of the contract alone create ambiguity (are contradictory), then extrinsic evidence of the parties’ intentions is warranted and should be allowed to be heard to explain exactly what the parties agreed upon. When a court finds that the terms of a contract are ambiguous, the meaning of the terms becomes a fact question. The parole evidence rule does not bar extrinsic evidence of a later modification of the otherwise unambiguous contract.

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