Ch.7 Contracts continued (Parole evidence)

  1. What is the Parol Evidence Rule
    If a contract has been made in writing, then oral evidence pertaining to the parties either before, or during the negotiating process that is to add, subtract, very, or qualify the existing written contract is inadmissible
  2. If the contract is in writing, what is the presumption?
    That the whole of the contract is covered by the text, and that this covers the entire relationship
  3. What are four reasons why oral evidence may be submitted into court proceedings?
    • 1) prove if rectification is needed
    • 2) to prove a collateral agreement - another agreement is made, and only permitted if the agreement does not contradict the written agreement, and not made simultaneously
    • 3) Misrepresentation that induced a party into signing a contract
    • 4) If the contract oral and only partly written
  4. What was the case where the courts used a collateral contract to bring in oral evidence?
    Hawrish v. Bank of Montreal (1969) S.C.R.
  5. What is a brief explanation of what Hawrish v. Bank of Montreal was about, and what is the legal principal that comes out of it?
    Solicitor signed a guarantee on account that the bank orally expressed that ounce another guarantee was established, he would be relieved of liability. However, ounce the other guarantee's were made, he was not relieved, and the written contract still held him accountable. He did not read the contract before signing. He argues that a collateral agreement existed, and for that reason, parol evidence would be allowed. The court disagreed.

    • Legal Principal
    • Collateral agreements require evidence of a clear intention to create a second binding contract. Furthermore, they cannot stand if they contradict or are inconsistent with the written text
  6. What was the case that was very similar to Harwish, and followed the decision?
    Bauer v. Bank of Montreal [1980]
  7. What was the principal in
    Bauer v. Bank of Montreal?
    If the only evidence to establish a collateral contract is oral, and it is inconsistent with or contradicts those of the written contract, the parole evidence rule applies, and oral evidence is inadmissible.
  8. Is the parole evidence rule a rule of law?
    No. It is a rule that when oral evidence contradicts the written text in the contract, there is a strong presumption that the written text was intended and binding.
  9. What case does the idea that the principal of the parole evidence rule is a presumption come out of?
    Gallen v. Allstate Grain Co.
  10. What are four things that come out of the case
    Gallen v. Allstate Grain Co.
    • 1) Parole evidence is a presumption and not a rule of law
    • 2) If oral assurances are given as warranties, you read them and the contract together
    • 3) If the are no contradictions between the oral evidence, and the written contract, then the parole evidence rule is less likely to apply, and a collateral contract may exist
    • 4) If the oral warranty contradicts the written text in the contract, then the presumption is strongest, and leans more in favour of the written contract; except if it is clear that the warranty was to prevail over a general exemption clause in the contract.
Card Set
Ch.7 Contracts continued (Parole evidence)
Ch.7 - Parole Evidence