The verbal evidence rule prevents extrinsic evidence from modifying or adding terms to a disputed contract, but exceptions exist for correcting errors, clarifying ambiguities, or adding clauses. Written contracts are legally binding, and changes must be made in writing. The rule applies only to final and complete contracts, and extrinsic evidence can be considered for partial integrations. Extrinsic evidence can be used to correct errors and ambiguities in both full and partial integrations.
The verbal evidence rule is a substantive rule of law which, in certain situations, prevents the introduction of extrinsic evidence to modify or add terms to a disputed contract or agreement. Ideally, a single contract or agreement is the complete and final expression of the agreement between or between the parties to the contract. In reality, contracts may be incomplete. In some cases, known as exceptions to this rule, evidence outside the contract may be considered for a variety of reasons, including to correct errors, clarify ambiguities, or add clauses to the contract. Extrinsic evidence that establishes exceptions, such as fraud and coercion, to the existence or otherwise of a valid contract, as well as agreements that are made after the contract in question, are not precluded by the standard – that type of extrinsic evidence can be considered .
General rules of the contract
When two individuals enter into a contract, the private promises contained in the document become legally binding. This means that one party can sue the other for breaking the promise – legally referred to as a breach of contract – and the court will impose financial penalties if the court determines that the defendant in the case has failed to fulfill his or her contractual duties. . In determining whether a contract has been breached and what damages are appropriate, the court looks at the terms of the written contract.
The parties to a contract can sometimes make changes or modifications to the contract. These changes can come in the form of an oral addendum, which means that the parties will verbally agree to change the contract. Under the verbal evidence rule, however, oral contracts or verbal amendments to a contract are not considered and cannot be introduced as evidence in a breach of contract case.
The verbal evidence rule exists because the court believes that a written contract is the best representation of the parties’ intentions when it comes to their agreement. In order for this rule to be applied, however, certain conditions, determined by the judge, must be met.
Final writing
For the rule of proof to apply, the written contract must be a definitive deed. This means that the court must find that both parties to the contract intended it to be a final representation of their agreement, and not just a draft or a contract still under negotiation. It can be a final and complete integration – in the sense that it is the final embodiment of the total agreement between or between the parties, or it can be a final and partial integration – in the sense that it is the final embodiment of a part of the total agreement between or between the parties. If the contract is not the final expression of the agreement of the parties, partial or total, the rule of verbal proof does not come into play and extrinsic proof can be introduced.
Full integration
Whether the contract is considered a full integration or a partial integration affects whether and what types of evidence can be considered. If it is complete, no written or oral agreements may be introduced that were made before or at the same time as the disputed contract to contradict or supplement the terms of the contract. The verbal evidence rule does not exclude extrinsic evidence that would resolve ambiguities or correct clerical errors in the contract.
Partial integration
If the contract is determined to be a partial integration, the verbal evidence rule prohibits examination of extrinsic evidence – written or oral – that was presented prior to entering into the contract if that evidence contradicts a contractual term. The rule also excludes the consideration of oral agreements made at the same time as the contract. However, the law does not prohibit the examination of extrinsic evidence – oral or written – which integrates or adds clauses to the contract. As with full integration, writer errors and ambiguities can be corrected or clarified with extrinsic evidence.
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