The Parol Evidence Rule Of Australia

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Write an essay on The “Parole Evidence Rule” according to the Contract law of Australia.


Based on Australian Contract Law, this essay will conduct a discursive study of the "Parole Evidence Rule." It is essential to gain a basic knowledge of the "Parole Evidence Rule" before moving on to the main subject. According to the understanding established by the Australian Contract Law, by virtue of this rule, the parties engaged by a written contract are forbidden from tampering with the evidence and disclosing them, while also giving clarity to the stated terms of contract and removing any ambiguity (Ayres). As a result, the contract created in this manner is clear and visible to both parties. It should be noted that the Common Law System of England served as the primary inspiration for Australia's Contract Law, and some of its legislative provisions are applicable here as well. The Australian Parliament changed the Contractual laws in the 1980s (Botero, David and Echeverry).

Conceptually, the term "parole" derives from legal French and Anglo-Norman words. The word actually comes from the Latin word "parabola," which means "speaking." The rationale behind the written contract's foundation is that the parties should be legally bound to one another both in terms of their shared understanding and in writing (Carlin). It has been clearly stated that while the agreement is being carried out in writing or is being interpreted, the contracting parties must not stray from or make any changes to the final understanding (Dyani, Ntombizozuko and Mtendeweka). The written agreement should not be affected by the contracting parties' decision to exit the arrangement; neither should it change the terms and legal interpretation of the written agreement. In other words, it is accepted that the evidence obtained and the understanding reached previous to the contract's documentation should not be in conflict with it (Emerson). In reality, it is regarded as essential by law that the agreement, reached with the consent of both contracting parties, be in writing in order for a contract to be enforceable. According to the court's ruling, it is referred to as the final agreement, which is binding on both parties in the long run and has legal force. The primary tenet of the parole evidence rule further suggests that the parole evidence cannot, under any circumstance, be in conflict with a final agreement that has been recorded between the contracting parties. However, it may support a course of business between two parties.

Understanding the critical approach used in the parole evidence and how the same is applied from a legal standpoint is equally crucial. It has been explained that the main goal of the parole evidence is to explain the regulations and describe how they would be put into practise in the various Australian territories. It should be noted that Australia's rule of contact law has long been a source of disagreement and has given birth to a number of contentious issues (Epstein, David and Timothy). The parole evidence rule has been the subject of discussion in Australia for a number of years, however it has been largely acknowledged that the constitutional framework of Australian contract law adopts an objective approach to contracting. The supporters of the parole evidence rule have recently expressed their concern, questioning whether a law should be drafted to make the parole evidence a proper statute or should be implemented to make it a common practise, despite the objective approach used in Australia to develop contracting laws. In fact, it should be recognised in view of the current situation that parole evidence has become more significant ever since the well-known case of Codelfa Construction vs. the State Railway authority of New South Wales. This case's judgement was rendered in 1982. (Epstein, David and Adam). It is clear from the case study that Codelfa Constructions and the state railways authority of New South Wales had a contract in place. By virtue of the contract, it was mutually agreed upon by the contracting parties that Codelfa Construction would be in charge of building two tunnels in Sydney for the expansion of the railway network. The plan's blueprinting was finished several months in advance. Additionally, it was said that Codelfa Building was given a deadline by which to complete the construction tasks. A date was set between the parties based on the estimated date. The Codelfa constructors quickly got to work in accordance with the deadline. They scheduled three shifts of work each day, which resulted in neighbourhood issues. The construction company was shortly subject to an injunction. As a result, the business was forced to temporarily halt their third shift. It was decided that building sites would reduce noise pollution from midnight to six in the morning. As a result, the Codelfa construction was compelled to impose additional fees on the New South Wales railway authorities that were the contracting party in order to comply with the company's altered work schedule. It follows that the main differences in the case of Codelfa Construction v. State Railway Authority call for an update and clarification of the written provisions of the agreement between the contracting parties. But as part of the adjudicative process Judge Mason had debated the significance of the parole evidence rule in a critical manner (Kee, Christopher and Elisabeth). As a result, it is clear that this case, which used parole evidence and was given a new level of significance in the judicial system, is among the most significant in Australia. As a result, it has been stated that Justice Mason carefully considered the parole evidence while preparing his judgement in the aforementioned case. Extrinsic evidences should not be considered in the parole evidence rule, he made that abundantly apparent. He went on to explain that this rule applied to any direct statements that were contradicted, added, removed, or altered in any way to the written agreement's documentation (Marcus, Paul, and Vicki). The aforementioned explanations regarding the significance of the parole evidence were thus clearly codified and made relevant in all Australian courts as well as American courts going forward.

However, it should be observed that when contrasted to Australia's objective approach to its contracting laws, the aforementioned clarification appeared to be fundamentally different. It has been noted that the main distinction lay in the fact that Australia's parole evidence rule made an exception for evidence that was naturally connected to a context's circumstantial circumstance. Therefore, it should be noted that Justice Mason referred to and adopted the straightforward approach and interpretation of Australian Contract law when coming to his decision, which categorically eliminated the use of any additional evidence for the court to consider if the contractual terms were precise and definite. Despite the seeming critique, it is important to keep in mind that Justice Mason went on to explain that if a simplified approach were taken, it would be essential to allow and accept other more evidence, particularly in contracts whose formation is based on other contextual elements. In order to examine any prospective contradictions and uncertainties that might be produced in the same contractual conditions in the future, it is crucial to understand those situational parameters (McCormick). The incorporation of the parole evidence, according to the American courts, leaves room for the fabrication of uncertainties, which is why they are concerned about it. It implies that granting this authorization would result in the contract having different interpretations and make it difficult for the court to render a clear decision. It has also been emphasised that the Australian objective contractual method renders the American approach redundant and superfluous. This is due to the fact that, in the judgement of the aforementioned case, the court would be making decisions based on the relevant interpretation of the situational dilemma and what actions a reasonable man might have taken in the given situation rather than just on the documented contractual terms and the parties' contractual interpretation (Mohamed).

The English and Australian Courts have explained that a Court is capable of elucidating, explaining, and interpreting a contract, without any reference to the external situation relevant to the contract formation, which is noteworthy from a historical perspective. The House of Lords had additionally emphasised in 1971 that the parties to the contract would be implementing their testimony in accordance with their intentions. The essential elements of the contract were not affected by this evidence. Most importantly, the contract must be separated from the broader context that existed when the parties involved drafted the provisions. As a result, it is implied that the court will strike down any contractual conditions that were not included in the original agreement. However, if it had been included in the written agreement, the court would have questioned the parties involved about their intentions and potential changes to the situation. Given this backdrop, Justice Mason had emphasised the inclusion of these contractual provisions as a significant piece of the parole evidence, but only after it had been conclusively established that the contracting parties were aware of the facts (Naylor, Brownwyn and Johannes). In light of this background, it is important to understand that previous evidence that was accepted and based on the evidences' factual foundation will no longer be regarded as evidence. Contrarily, the evidence would only be referred to and addressed if the contracting parties were familiar with the facts and circumstances of the case and the relevant evidences. Nothing else will be taken into account as evidence unless and until it was specified in the written agreement (Ostendorf). The objective theory of the contracting rule is another name for it. It was argued that this rule would allow the contracting parties' intentions to be taken into account. This suggested that the validity and applicability of the parties' intentions under the contract would be examined in the particular instance. Aside from that, the primary focus of the case was on the goals of the concerned contracting parties. In light of this methodology, the Court of Australia was forced to concede the veracity of the background data as a piece of incriminating evidence that the jury had accepted. Furthermore, it is argued that the court should read the wording and provisions of contracts in a way that is consistent with how the contracting parties understood them, with no regard for the parole evidence rule. In light of this, Judge Mason's explanation of the objective rule in Joseph may be cited as follows: "There may perhaps be one circumstance in which evidence of the parties' actual intentions should be permitted to predominate over their imagined intentions. It may be appropriate to get proof of the parties' refusal to insert a clause in the contract that would have given effect to the presumptive intention of people in their position. After all, the court is interpreting the parties' agreement, and as part of that process, it considers the meaning that a reasonable man in that circumstance would have wanted to convey with the terms used. But is it appropriate to go that exercise so far as to give the contract's words a meaning that both parties have agreed to reject? It is feasible to obtain proof of shared intent, if it amounts to concurrence, in order to refute a conclusion that is being tried to be made from the context.

Justice Mason has occasionally embraced the arbitrary nature of contract law. The law emphasises the significance of observing the terms and conditions of contracts. It has been noted that the subjective theory's predictions seem to have no flaws. This is a result of the jurisdiction's preference for doing the contractual analysis in accordance with the objective theory. It is clear the reasoning behind Justice Mason's preference for adhering to the contract's objectivity.

In addition to the aforementioned justification, there are other factors that support Justice Mason's propensity to adhere to the objective theory, the most significant of which is how he views the court's function. Mason argues that if the Court rejects the parties' intents without first comprehending their points of view, it is treating the parties unfairly. However, in America, a whole different set of viewpoints control how contracts are understood by the legal system. In America, contractual terms and conditions are regarded as being more significant than the intentions expressed or implied by the parties. Therefore, it wouldn't be incorrect to assume that Australia prefers to adhere to objective theories and their hypotheses.

This essay presents a comparatively unbiased viewpoint. That is to say, neither the objective nor the subjective theories of contracts, nor how they would affect the parole evidence, would be taken into account in the development of the discussions in this article. As a result, both theories can be viewed as supporting the proper contract-making format (Pichhadze).

According to the objective view, it is more likely that the parties will act in a manner that deviates from the terms of the contract in general. This is typically done so that the party can accomplish a particular objective that differs from what is specified in the contract. When it comes to the formality of the contract's execution, the social sphere is typically not taken into account. The contract is primarily seen as written documentation, which does not necessarily have to be a durable and trustworthy record. This agreement between the two parties frequently serves as a means of compliance with a certain social action. The formalisation of the contract establishes the interactions between the non-inmates. Additionally, the contract is based on a set of standards that must be followed within the constraints of how disputes can be settled in order for the boundaries of the contract to be understood. The predictable nature of the defined provisions determines the contractual ties. These terms and procedures are created by considering whether the contractual arrangement is practical. Thus, the interpretation has importance. This is due to the fact that the manner in which the contract would be interpreted would determine the judgment's objectivity. Because of this, the nature of the contract itself is more crucial in this situation than the connections between the parties (Schauer). The interpreter's major goal is to comprehend how public activities can be used to judge or support contractual behaviour.

In light of the comparison between subjective and objective conceptions of contract norms, the role of the players becomes crucial. The key actors who would be affected by the many ways that social integrations of contract creation might be influenced are the people, it should be highlighted. The parole evidence is crucial to knowing which agreements can be applied with the fewest possible compliance requirements. The presumptions would typically not correspond with the adjustments that the parties should make to allow for the development of the case's background. When evaluating the objective and subjective definitions of contract law, intent becomes crucial. Understanding the goals of the actors who are included in the contract will be necessary to make the necessary changes. Agreements between members of the family and individuals who are regarded as close friends need not be avoided. This is significant since the agreement is essential in defining the interpersonal interactions. Understanding the personal contract that must be created in terms of how the family members define their own positions is crucial. To specify the contractual behaviour of the actors who are included in the contract development, this would be crucial.

In order to comprehend how specific rules of the Contract can be established within the rule that is followed by the contracting parties, consideration of outside evidence is typically used. This is not the case with the parole evidence rule. As the contract is clarified in terms of the adjustments that must be made, the identification and building of the various responsibilities that are outlined under the Evidence rule become significant. The parole evidence rule's primary goal is to limit the consideration of earlier contracts that might have been used to define the current contract by adhering to its form.

Extrinsic evidence is any type of evidence that cannot be admitted or taken into account when taking into account the restrictions of the contract or parole evidence. Extrinsic evidence consists of written materials such as letters and draughts that may have been created at an earlier stage of the negotiating process. Such extrinsic material is deemed to be unimportant to the overall contract by the parole evidence rule (Schiavo). The terms of the parole only apply to written agreements that have been formed or developed. The parole's terms and conditions are regarded as crucial for elucidating any issues or ambiguities that may exist in the contract. Therefore, the entire purpose is to ignore the criteria that do not apply to the contract's context.

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Epstein, David G., Adam L. Tate, and William Yaris. "Fifty: Shades of Grey-Uncertainty About Extrinsic Evidence and Parol Evidence After All These UCC Years." Ariz. St. LJ 45 (2013): 925.

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Ostendorf, Patrick. "The exclusionary rule of English law and its proper characterisation in the conflict of laws–is it a rule of evidence or contract interpretation?." Journal of Private International Law 11.1 (2015): 163-183Perillo, Joseph M. "Donee Beneficiaries and the Parol Evidence Rule." . Thomas L. Rev. 26 (2013): 496.

Pichhadze, Amir. "Can, and Should, the Parole Evidence Rule Be Invoked by or Against Tax Authorities in Tax Litigation? Distilling Lessons from US Jurisprudence." Bulletin for International Taxation 67.9 (2013): 474-490. Schauer, Frederick. "On the Relationship Between Legal and Ordinary Language." Speaking of Language and Law: Conversations on the Work of Peter Tiersma (2015): 35.

Schiavo, Frank L. "Alternative Approach to the Parol Evidence Rule: A Rejection of the Restatement (Second) of Contracts; Mitchill v. Lath Revisited, An." Cap. UL Rev. 41 (2013): 759.

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