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The parol evidence rule applies where an agreement is recorded in writing and one of the parties proffers evidence to prove a term that is not contained in the writing or to explain or expand on a term in the writing. As noted several times before, particularly in Chapter 11, contemporary law includes in the concept of writing not just words written on paper, but also forms of recording by electronic or other means.
The parol evidence rule is closely intertwined with the process of interpretation. As you read this chapter, you will see many links to the discussion of interpretation in Chapter 10. The following general observations on the relationship between the parol evidence rule and interpretation should help to keep things straight.
Although there are some passing references to the parol evidence rule in Chapter 10, that chapter was concerned purely with the rules and principles governing the interpretation or construction of contracts to determine the parties’ reasonable meaning. The central point of Chapter 10 is that unless there is no evidence of context available, the meaning of language used in the contract is not usually determined purely by reference to the dictionary meaning of the words, but by reading the words in the entire context of the transaction. This context may include the discussions between the parties in forming the contract, their previous course of dealing in prior contracts of the same kind, trade usage, and their postformation course of performing the contract. Where the agreement has been recorded in writing, the parol evidence rule qualifies what was discussed in Chapter 10 by placing controls on recourse to this extrinsic evidence. In short, it restricts the extent to which some contextual evidence may be considered in deciding what the parties intended in entering the contract.