Parol Evidence Rule

The Court of Appeal in Hipwell & Son v Szurek [2018] EWCA Civ 674 stated the rule concisely at [20]: 'the parol evidence rule is that evidence is ordinarily inadmissible to vary or contradict the terms of a written contract'. In modern practice the rule is reinforced by entire agreement clauses, described in the same judgment as giving it 'full force and conclusive effect as an integral part of the parties' bargain'. The rationale, quoted from Lightman J in The Inntrepreneur Pub Company v East Crown Ltd [2000] 2 Lloyd's Rep 611, is that such a clause exists so that 'any promises or assurances made in the course of negotiations (which in the absence of such a clause might have effect as a collateral warranty) shall have no contractual force'.

The rule is subject to significant qualification, most notably the collateral contract doctrine, which allows a pre-contractual statement to take effect as a separate, subsidiary agreement rather than a variation of the written terms. The Court of Appeal recorded in Hipwell & Son v Szurek at [22] that 'the Law Commission, as long ago as 1986, recommended that an entire agreement clause, though of very strong persuasive effect', should not be treated as conclusive - an official acknowledgement, traceable to the Law Commission's 1986 report on the parol evidence rule (Law of Contract: The Parol Evidence Rule, Law Com No 154), that in practice courts frequently admit extrinsic evidence to determine what the parties actually agreed, notwithstanding the rule's formal statement.