An Alternative Approach to the Parol Evidence Rule: A Rejection of the Restatement (Second) of Contracts; Mitchill v. Lath Revisited

Author:Frank L. Schiavo
Position:Associate Professor of Law, Barry University Dwayne O. Andreas School of Law; B.S. 1956, Wharton School, University of Pennsylvania
Pages:759-777
 
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AN ALTERNATIVE APPROACH TO THE PAROL
EVIDENCE RULE: A REJECTION OF THE
RESTATEMENT (SECOND) OF CONTRACTS;
MITCHILL V. LATH REVISITED
FRANK L. SCHIAVO*
I. INTRODUCTION
As early as 1898, Professor Thayer observed that “[f]ew things are
darker than [the parol evidence rule], or fuller of subtle difficulties.1
Professor Wigmore similarly noted, “[I]t is not strange that the so-called
parol evidence rule is attended with confusion and obscurity which make it
the most discouraging subject in the whole field of evidence.”2 Professor
Sweet described it as “a maze of conflicting tests, subrules, and
exceptions,”3 and Professor Murray noted that the rule has been described
as “a legal concept whose mysteries are familiar to many but fathomed by
few.”4
It is not surprising that the rule confuses students, teachers, and
scholars. The Restatement (Second) of Contracts does nothing to alleviate
the confusion. Its methodology only adds to it. This Article suggests an
approach to the parol evidence rule that is simpler, but retains the essence
of the rule.
Copyright © 2013, Frank L. Schiavo.
* Associate Professor of Law, Barry University Dwayne O. Andreas School of Law;
B.S. 1956, Wharton School, University of Pennsylvania; J.D. 1959, Villanova University
School of Law; LL.M. (Taxation) 1965, New York University School of Law. The author
teaches in the areas of Contracts; Federal Income Tax; and Wills, Trusts, & Estates. The
author is indebted to Susan S. Bendlin and Daniel P. O’Gorman for th eir comments and
suggestions on drafts of this Article and to his research assistant, Karen Nolan, who
rendered valuable assistance in finalizing this Article.
1 JAMES BRADLEY THAYER, A PRELIMINARY TREATISE ON EVIDENCE AT THE COMMON
LAW 390 (Augustus M. Kelley Publishers 1969) (1898).
2 9 JOHN HENRY WIGMORE, EVIDENCE IN TRIALS AT COMMON LAW § 2400 (James H.
Chadbourn rev., Little, Brown & Co. 1981).
3 Justin Sweet, Contract Making and Parol Evidence: Diagnosis and Treatment of a
Sick Rule, 53 CORNELL L. REV. 1036, 1036 (1968).
4 JOHN EDWARD MURRAY, JR., MURRAY ON CONTRACTS § 82(B) (LexisNexis, 4th ed.
2001).
760 CAPITAL UNIVERSITY LAW REVIEW [41:759
II. THE RULE
The Restatement (Second) of Contracts describes the parol evidence
rule as a “binding integrated agreement [that] discharges prior agreements
to the extent that it is inconsistent with them” or “to the extent that they are
within its scope.”5 The rule is designed to prevent adding terms to a
written agreement that the parties may have agreed to prior to or
contemporaneously with the written agreement, but that were omitted from
the final written agreement.6 The rule only applies if the second agreement
is written, regardless of whether the first agreement is oral or written.7
It must be understood that the parol evidence rule is not applicable
until the written agreement is enforceable.8 Thus, any evidence would be
admissible to show the agreement is unenforceable due to fraud, mistake,
illegality, or accident.9 Furthermore, if none of the terms in the writing are
final (e.g., a letter of intent or preliminary memorandum), the parol
evidence rule is not applicable because such a writing is not enforceable.10
The parol evidence rule serves two separate functions and answers the
question of why the evidence was offered: (1) the first function is
determining what terms are part of the contract, i.e., what is the content of
the written agreement?11; (2) the second is determining what those terms
mean, i.e., it has a role in interpretation.12 Professor Margaret N. Kniffen
compares these two functions to an Emperor and Empress, each “clothed in
different requirements”:
Contract interpretation, which can be labeled the Empress,
functions to assign meaning to terms already contained
within a contract. In contrast, the parol evidence rule,
which can be designated the Emperor, determines whether
5 RESTATEMENT (SECOND) OF CONTRACTS § 213(1)–(2) (1981).
6 MURRAY, supra note 4, § 82(B).
7 Id. § 82(A) (“Where the second agreement is evidenced by a writing, the parol
evidence process may become operative whether the prior agreement was oral or written.”).
8 See JOSEPH M. PERILLO, CALAMARI AND PERILLO ON CONTRACTS § 3.2 (6th ed. 2009).
9 Arthur L. Corbin, The Parol Evidence Rule, 53 YALE L.J. 603, 625–26 (1944).
10 See id. at 638.
11 PERILLO, supra note 8. This leads to two questions: “[W]hether (1) the writing is [an]
integration, and (2) if so, whether it is a total or only a partial integration.” Id. See also
RESTATEMENT (SECOND) OF CONTRACTS § 210(1)–(2) (1981).
12 See PERILLO, supra note 8.

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