‘Where a written contract exists, Australian courts do not provide (and should not provide) remedies for breach of any verbal promises that were made during contract negotiations, unless those verbal...

SUMMARY
In this research paper we are discussing two main laws the parol evidence rule and
collateral contracts. We will discuss these laws in detail one by one. Parol evidence law is a law
pertaining to the contract cases. It basically prevents a party involved in a written contract from
preventing evidence that can go against the statement of the written contract. The main idea is
that the parties have agreed to the final terms and conditions while the statement was made and
they are not liable to change their statement after that. Collateral contact is generally a sunset of a
main contract. A collateral contact’s example could be, when one party is ready to pay up a
second party to enter into a third contract. This contract can also exist between the main party
and any random third party. It is used by the main parties to resolve conflicts with the second
party. We further discuss the exceptions to the rule and then reach to particular evidence.
Introduction
As a contractor, there are many chances where you can be involved in a contract dispute. The
Parol Evidence rule states that when a contract is in writing ,it is assumed that the content of the
contract has all the terms and conditions and if there is any further evidence of any prior
agreement it will not be considered to have any effect on it. Let us see what we exactly mean by
the term Collateral Contract. It is basically a law. Collateral contract doctrine is a law that states
that when two parties get into disputes when a written contract is a proof than usually oral
agreements are not included in the parol evidence rule. If the oral agreement is independent and
with written contract than all the information mentioned in the contract won’t be ordinarily be
expected to be mentioned in the written contract. This law is termed as collateral agreement
doctrine.
Parol Evidence Rule
As mentioned earlier, this rule states that when a contract is in writing ,it is assumed that the
content of the contract has all the terms and conditions and if there is any further evidence of
any prior agreement it will not be considered to have any effect on it (Burnham, 2003).
According to this rule oral evidences are not allowed to contradict with the written agreements.
Parol evidence rule is the rule that gives foremost importance to the written agreement over the
oral agreement in the court of law (Bo
itt, 2010). For example:- any legal contract like an
insurance contract which is of written nature cannot be superseded by any oral statements made.
Usually standard agreements are used for legal purposes and so every agreement is not reduced
to writing. This is usually done for the contracts that are in print form and if any changes are
made than they are not written only but can also be done through handshake terms also.
Suppose if the contract is in writing than parol will not be included.
There are aspects to the rule which are as follows:-
The matter of the contract:-
Parol evidence cannot supersede the intentions of the parties to the contract where they want the
contract to be wholly in writing (Burnham, 2003). However this rule will not apply to contracts
that are partly oral and partly written in nature.
There are some exceptions to the rule:-
(a) Evidence of collateral contract
(b) Evidence that the written contract is not yet in force
(c) Evidence that the written document was later varied or discharged
(d) Evidence necessary for rectification
(e) Custom or usage
(f) Retification
a)Evidence of contract:-
If there is any main evidence which is affecting the contract it will not apply to collateral
contracts so if there is any ve
al evidence it would be valid. This rule continues to remain...