Parol evidence rule
Source:
Section 41.740 — Parol evidence rule, https://www.oregonlegislature.gov/bills_laws/ors/ors041.html.
Notes of Decisions
In general
Notwithstanding existence of the filled-in form contract defendant was entitled to introduce evidence that the contract was not as agreed and that there was “no contract.” Pendleton Grain Growers v. Pedro, 271 Or 24, 530 P2d 85 (1975)
Reliance on the parol evidence rule cannot be raised for the first time on appeal. Allen v. Allen, 275 Or 471, 551 P2d 459 (1976)
Even if the parol evidence rule would permit proof of an alleged collateral oral agreement, there was no evidence it was breached. Hamilton v. Auto Driveaway Co., 278 Or 529, 564 P2d 1052 (1977)
Parol evidence rule does not apply unless parties intended writing to memorialize terms of agreement. Livran v. Fowler Tire Service, Inc., 282 Or 379, 578 P2d 1244 (1978)
Provisions of contract for sale of plywood and veneer business concerning indemnification for product liability claims were clear and unambiguous, precluding admission of parol evidence. Southwest Forest Industries v. Vanply, 43 Or App 347, 602 P2d 1113 (1979)
Vendor’s statements could not be excluded under parol evidence rule when vendees were also asserting right to rely on events or agreements outside scope of written land sale contract. Marshall v. Wattles, 67 Or App 442, 678 P2d 762 (1984)
Oral agreement to term of contract made prior to conflicting term in written contract is not waiver of right to rely on written terms, but is inadmissible parol evidence. Mid-River Transportation Services, Inc. v. VanPelt, 121 Or App 532, 854 P2d 506 (1993), Sup Ct review denied
Writing is to be considered as containing all the terms of the agreement
Oral agreement is not superseded or invalidated by subsequent or contemporaneous integration, nor written agreement by subsequent integration relating to same subject matter, if agreement is not inconsistent with the integrated contract, and (1) is made for separate consideration, or (2) is such an agreement as might naturally be made as separate agreement by parties situated as were the parties to the written contract. DeVore v. Weyerhaeuser Co., 265 Or 388, 508 P2d 220 (1973), cert. denied, 414 US 1108, 38 L Ed 2d 736, 94 S Ct 836
Oral admissions of plaintiff that agreement included matters not contained in the writing may be proved to show that it was not assented to as a complete integration, however complete it may look on its face. DeVore v. Weyerhaeuser Co., 265 Or 388, 508 P2d 220 (1973), cert. denied, 414 US 1108, 38 L Ed 2d 736, 94 S Ct 836
The parol evidence rule will not exclude evidence of an oral agreement which is not inconsistent with the written contract, and which is such as might naturally be made separately under the circumstances. Rodasky v. Loucks, 267 Or 521, 517 P2d 665 (1973)
Evidence of oral “stipulations” that were reduced to writing and attached to the base before plaintiff signed the lease was properly admitted. Wall v. S.E.C. Co., Inc., 270 Or 553, 528 P2d 1054 (1974)
Circumstances indicating whether document is intended as complete include business experience of parties, use of legal counsel, relative bargaining power of parties and apparent completeness of document. Hatley v. Stafford, 284 Or 523, 588 P2d 603 (1978)
Court determination on how court finding of fact regarding document and party intent affects admissibility of evidence is reviewable as matter of law. Wescold, Inc. v. Logan International, Ltd., 120 Or App 512, 852 P2d 960 (1993), Sup Ct review denied
Particular instruments or agreements
Parol evidence is not admissible to vary or contradict the terms of a consent decree where the consent decree is unambiguous on its face. Renken v. Harvey Alum. Inc., 347 F Supp 55 (1971)
Evidence of oral “stipulations” that were reduced to writing and attached to the base before plaintiff signed the lease was properly admitted. Wall v. S.E.C. Co., Inc., 270 Or 553, 528 P2d 1054 (1974)
Parol evidence is admissible to show a condition precedent to the enforceability of a bank check. Engelcke v. Stoehsler, 273 Or 937, 544 P2d 582 (1975)
Where property settlement agreement provided only that each party released and discharged the other from all claims and property demands and made no mention of life insurance policy, this section did not prevent trial court from receiving parol evidence showing decedent’s intent to retain former spouse as beneficiary of insurance policy. Prudential Insurance Co. v. Weatherford, 49 Or App 835, 621 P2d 83 (1980)
Where definitive fourteen-page contract was signed by parties after four months of negotiation following execution of earnest money agreement and where contract expressly provided that it constituted entire agreement of parties, parol evidence rule prohibited consideration of terms of earnest money agreement or evidence of negotiation in interpretation of contract. Oakridge Cablevision, Inc. v. First Interstate Bank, 65 Or App 640, 673 P2d 532 (1983)
Showing intent or understanding
Evidence of contracting party’s unilateral intention, rather than the mutual intention of the parties, was properly excluded. Fry v. D. H. Overmyer Co., 269 Or 281, 525 P2d 140 (1974)
Application of indemnity clause to plaintiff’s signing of lease for corporation shortly before plaintiff was formally made officer, director and shareholder created extrinsic ambiguity as to scope of indemnity clause and allowed consideration of parol evidence regarding intent of parties. Rodway v. Arrow Light Truck Parts, 96 Or App 232, 772 P2d 1349 (1989)
Trial court did not err when it excluded parol evidence regarding parties’ understanding of terms “leased” and “occupied” in commercial lease because terms were neither patently nor latently ambiguous as used in agreement. Hayden Corporation v. Gayton, 98 Or App 703, 780 P2d 787 (1989)
Collateral oral agreements
The parol evidence rule does not affect a parol collateral contract independent of a written agreement. Blehm v. Ringering, 260 Or 46, 488 P2d 798 (1971)
An oral agreement placing a condition precedent on the effectiveness of a written contract is operative unless such condition is inconsistent with the language in the writing. Osburn v. Lucas, 263 Or 480, 502 P2d 1382 (1972)
Although literal reading of this section would exclude any parol evidence of agreement reduced to writing, court has treated statute as codification of common law parol evidence rule and recognized the various common law exceptions to the rule. Hatley v. Stafford, 284 Or 523, 588 P2d 603 (1978)
Evidence of oral agreement accompanying written real property transaction was properly admitted under this section since it was not inconsistent with written terms and was such that it was natural, considering all the circumstances, that parties enter into separate agreement. Greenwade v. Citizens Bank of Oregon, 50 Or App 395, 624 P2d 610 (1981)
This section bars admission of evidence of alleged oral agreement made before written agreement only if parties intended writing to be final and complete expression of their agreement. Siegner v. Interstate Production Credit Assn., 109 Or App 417, 820 P2d 20 (1991)
Conversation occurring after execution of written agreement was not admissible as evidence of alleged oral agreement reached prior to execution of written agreement. Abercrombie v. Hayden Corp., 320 Or 279, 883 P2d 845 (1994)
Evidence of circumstances
Regardless of a written agreement, petitioner was entitled to present evidence in support of his claim based on a theory of implied contract or quantum meruit. State ex rel Hwy. Comm. v. Chaparral Recreation Assn., 17 Or App 416, 522 P2d 236 (1974)
In a proceedings to establish primary liability for the payment of a deficiency in a foreclosed mortgage, parol evidence of the circumstances under which the earnest money agreement was executed was admissible to resolve the ambiguities in such agreement as to the parties’ intent. U.S. v. Pollard, 524 F2d 808 (1975)
Court may consider circumstances underlying formation of contract to determine whether particular contractual provision is ambiguous. Batzer Construction, Inc. v. Boyer, 204 Or App 309, 129 P3d 773 (2006), Sup Ct review denied
Evidence to establish illegality or fraud
Proof of fraud by evidence of prior or contemporaneous promises and representations is not prohibited by this section. Howell v. Oregonian Publishing Co., 82 Or App 241, 728 P2d 106 (1986), as modified by 85 Or App 84, 735 P2d 659 (1987), Sup Ct review denied
Evidence alleging contract to be sham is challenge to validity of contract, not attempt to vary terms of contract. Roberts v. Maze, 161 Or App 441, 985 P2d 211 (1999), Sup Ct review denied
Evidence to explain ambiguity
In a proceedings to establish primary liability for the payment of a deficiency in a foreclosed mortgage, parol evidence of the circumstances under which the earnest money agreement was executed was admissible to resolve the ambiguities in such agreement as to the parties’ intent. U.S. v. Pollard, 524 F2d 808 (1975)
Evidence of signator’s intent was admissible where credit agreement was ambiguous on its face. Bonded Credit Company v. Hendrix, 282 Or 35, 576 P2d 795 (1978)
Where it was unclear whether parties intended that monthly payments be spousal support or property division, in light of surrounding circumstances trial judge was entitled to consider parol evidence of what parties intended to accomplish by monthly payments. Truax and Truax, 62 Or App 130, 659 P2d 983 (1983)
Parties to contract
An agent who entered into a land sale contract for a disclosed principal was a party to the contract and entitled to enforce the contract individually where: 1) the contract named him as purchaser and individual without reference to the principal or fact that he was an agent; 2) the seller did not care who the principal was; and 3) the agent signed a demand note and an application for a conditional use change in his individual name. Ritchie v. Mundon, 268 Or 283, 520 P2d 445 (1974)
Law Review Citations
54 OLR 243 (1975); 28 WLR 223 (1992); 84 OLR 369 (2005)
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