[Victoria university business law]
The Australian court has some strict rules regarding the contract that are made by parties during trade and business. At times, parties make verbal promises with each other which they decide to enter in the clause and later on forget to, or sometimes it so happens that a verbal promise is added in the contract but is breached by the parties. For these types of situations, the Australian courts have various rules which each and every business has to follow. The paper will discuss the legal rule which is known as the ‘parole evidence rule’ as well as the legal concept of ‘collateral contract’ rule. Furthermore, both the concepts will be discussed by relating it to the statement that Australian courts do not provide remedies for breach of any verbal contract which is included in the written version of the contract.
The parole evidence rule
This rule deals with a contract which is decreased to writing and the writing that appears is complete, it is assumed that writing consists of all the terms and later on any proof will not be acknowledged of any other settlement other than the ones written and no effect will take place with regard to adding, subtracting or even varying it, in any form .
Every time, writing is not completely decreased between parties during agreements. This kind of specific case only takes place when there is pre written typical type contracts which are used and alter to the basic form might not be printed down, however settled with a greeting.
The parole evidence rule has two aspects which are the matter of the contract and the understanding of the contract. The matter of the agreement deals with the feature that says that if the organization planned the agreement to be entirely in text, parole proof is not acceptable to include or change or conflict the text.
The rule further states that any proof of extrinsic conditions only where the text was settled to be a total proof of the whole agreement, therefore does not relate where the settlement is fairly printed and fairly verbal. The example can be the changing of a pre writing contractual document.
There are certain exemptions to this aspect of the parole evidence rule. The exceptions are evidence of collateral contract; evidence that the written contract is not yet in force; evidence that the written document was later varied or discharged; and evidence of necessary ratification .
The evidence of collateral contract deals with the obstacle of extrinsic evidence being led to influence the central agreement does not relate to the guarantee agreement, thus, verbal proof connecting to that agreement can be led. The law will go on to function in relative to the major agreement.
Evidence that the written agreement is not yet in power is a rule that operates only if the contract is in power and that the contractual text agreement is reflected in the printed documents.
Evidence that the written document was later differed or cleared is the rule that stops the beginning of extrinsic proof that the groups changed the settlement prior to it was decreased to text, not evidence that the groups later settled to its dissimilarity or release. If the contract was necessary to neither be in writing to be implemented, neither the alternative nor clear need be in writing. Consequently, spoken or other evidence can be led that the printed agreement has been later altered or released.
Evidence necessary for rectification is a rule that usually avoids the initiation of proof to add to, subtract from or change the arrangement, the law will not eliminate such proof if it is essential to correct the written text so as to fix such a fault. The example is the proof of a separate total other than settled upon for obtain of a house.
The interpretation of the contract
The second aspect of the parole evidence rule is the interpretation of the contract. It...