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Parol Evidence Rule

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The "parol evidence rule" primarily pertains to contracts. The "rule" addresses the question of whether additional information or evidence can be used to explain or alter a written contract. Although the general rule stated below has exceptions, the implication of the general rule is that anyone entering into a contract must be careful to assure the written agreement accurately reflects the complete understanding between the parties.

The general rule:

"Where parties, without any fraud or mistake, have deliberately put their engagements in writing, the law declares the writing to be not only the best, but the only, evidence of their agreement: . . . all preliminary negotiations, conversations and verbal agreements are merged in and superseded by the subsequent written contract . . . and unless fraud, accident, or mistake be averred, the writing constitutes the agreement between the parties, and its terms cannot be added to nor subtracted from by parol evidence.

Syversen v. Hess, 2003 ND 118


[N.D.C.C.] "9-06-07. Written contract supersedes oral negotiations.--The execution of a contract in writing, whether the law requires it to be written or not, supersedes all the oral negotiations or stipulations concerning its matter which preceded or accompanied the execution of the instrument."

We have previously held that "[t]his is a legislative enactment, in part, of the parol evidence rule. This is not an evidentiary or interpretive rule, but rather one of substantive law." . . . Parol evidence is admissible, however, when the writing is ambiguous. . . Whether or not the writing is ambiguous is a question of law for the court to determine.

The note itself [in this case] is clear, certain, and unambiguous.

Evenson v. Hlebechuk, 305 N.W.2d 13 (N.D. 1981)


The parol evidence rule is not a rule of evidence, but rather, it is a rule of substantive law. . . . The parol evidence rule is codified, in part, in . . . Section 9-06-07 [N.D.C.C., which] provides that a written contract supersedes all prior or contemporaneous oral agreements or conditions concerning the subject matter of the contract, even though the contract is not required to be in writing. . . .

[I]t is well-established that parol evidence is admissible in a suit to reform a written instrument on the grounds of fraud or mutual mistake of the parties. Parol evidence is admissible not only to establish the alleged fraud or mistake, but also to correct the instrument to conform to the agreement or intention of the parties. . . . Thus, reformation is a limitation on the parol evidence rule which is necessary to reach a just result.

Any evidence which tends to show the true intention of the parties, whether it be evidence of conduct or declarations of the parties extrinsic to the contract or documentary evidence, is admissible. . . . parol evidence is admissible in an action for reformation of a contract to establish fraud or mutual mistake as well as to show the true intention of the parties. To hold otherwise would render the parol evidence rule an instrument of the very fraud or mistake it was designed to prevent. In the absence of such a salutary exception to the parol evidence rule, it would be virtually impossible to establish the grounds relied on for reformation. . . .

"[P]arol evidence of an alleged mutual mistake as a basis for the modification of a written instrument must be clear, satisfactory, specific and convincing, and a court of equity will not grant the high remedy of reformation even upon a mere preponderance of the evidence, but only upon the certainty of error. . . ."

Each case involving the reformation of a contract on grounds of fraud or mutual mistake must be determined upon its own particular facts and circumstances. In considering whether or not a mutual mistake exists, the court can properly look into the surrounding circumstances and take into consideration all facts which disclose the intention of the parties.

City of Fargo v. D.T.L. Properties, Inc., 1997 ND 109, 564 N.W.2d 274



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