What does the Parole Evidence Rule state about modifying a written contract?

The Parole Evidence Rule primarily addresses the issue of whether oral statements or agreements made prior to or at the same time as the signing of a written contract can modify the terms of that written contract. According to this rule, once a contract is finalized in writing, it is generally assumed that the written document encompasses the full understanding and agreement between the parties involved. Therefore, modifications to such a contract must typically be made in writing to be legally enforceable, unless certain exceptions apply—such as situations involving subsequent conduct of the parties that demonstrates a change in the agreement.

For example, if two parties enter into a written agreement and later wish to change some terms based on a verbal conversation, the Parole Evidence Rule would typically exclude that verbal agreement from being considered in a dispute related to the contract. This ensures clarity and stability in contractual agreements, requiring any modifications to be documented properly in writing to avoid misunderstandings and to maintain a clear record of the parties' intentions.