Section 1 Contracts
Section 2 Federal Securities Acts
Section 3 Secured Transactions
Section 4 Bankruptcy
Section 5 Debtor-Creditor Relationships
Section 6 Agency
Section 7 Regulation of Employment
Section 8 Business Structure
Section 9 Professional and Legal Responsibilities
Section 10 Individual taxation
Section 11 Corporate Taxation
Section 12 Partnership Taxation
Section 13 Transactions in Property
Section 14 Gift and Estate Tax, Trusts And Exempt Organizations, Other Taxation Topics

1.5 The Parol Evidence Rule

The Parol Evidence Rule answers the question whether or not a written contract can be amended orally at a later time.

The first point is that a written contract intended by the parties to be final and complete may not be contradicted by previous or contemporaneous written or oral evidence. In other words, one may not introduce as evidence prior drafts or discussions right up until an agreement is reached.

However, subsequent changes may be made by the parties to amend a prior written agreement. For example, you can enter into a written consulting agreement to render 20 hours a month of services.  Later on, you can orally amend the agreement to increase or decrease the time spent.

In “real life”, if a dispute occurs, it may be difficult to prove that there was agreement with respect to the modifications.

Note that previous evidence can be used to prove fraud, mistake or duress.

Please answer the questions below and review your answers.

Question 20 illustrates the workings of The Parol Evidence Rule.  Review the model solution carefully if you gave a wrong answer. Question 21 illustrates a common form of IQEX multiple choice question.  It is basically a modified true/false question. First work with one of the columns. If you are sure the answer is, for example, “yes”, you can eliminate two of the four choices.  Then look at the other column. In a worst case, you may have to guess between the two remaining choices.

By now you should begin to understand why I made the comment in my course introduction that questions tend to be repeated from year to year. The concepts don’t change, so there really is no need to re-invent the wheel by creating new questions to determine whether candidates know their material.

Section 1 Q 21