Parol Evidence Rule

Published: | Updated: November 27, 2017

Definition - What does Parol Evidence Rule mean?

The parol evidence rule is a law that invalidates evidence that runs contrary to the terms of a contract. It honors what is written in the contract and ignores what is not, even if the information could be true.

Insuranceopedia explains Parol Evidence Rule

When a contract is written, agreed on by all parties concerned, and signed by all of them, the court will find contradictions against its terms inadmissible when the contract is contested.

For example, suppose Ben and Frank strike up a contract in which Ben agrees to sell an asset to Frank on a specific date and a specific amount. Suppose further that Ben fails to do so on both counts. He might tell the court that he already told Frank he changed his mind and Frank agreed to cancel the sale as well. The court, however, will still honor the contract and will dismiss Ben's story.

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