Texas Causes of Action & Affirmative Defenses

Texas Causes of Action & Affirmative Defenses

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Friday, October 21, 2011

Admissibility of testimony [parol evidence] regarding contract terms

When may a court consider parol evidence (testimony as to terms) when interpreting and enforcing a contract?

MERGER OR INTEGRATION CLAUSE generally bars parol evidence

Generally, a written instrument presumes that all prior agreements relating to the transaction have been merged into it and it will be enforced as written and cannot be added to, varied, or contradicted by parol testimony. See Baroid Equip., Inc. v. Odeco Drilling, Inc., 184 S.W.3d 1, 13 (Tex. App.—Houston [1st Dist.] 2005, pet. denied); Wilkins v. Bain, 615 S.W.2d 314, 315 (Tex. Civ. App.—Dallas 1981, no writ).

This rule is particularly applicable where the written contract contains a recital that it contains the entire agreement between the parties or a similarly worded merger provision. See Weinacht v. Phillips Coal Co., 673 S.W.2d 677, 679 (Tex. App.—Dallas 1984, no writ).


However, in case of an incomplete instrument, an exception to the parol evidence rule applies, even though fraud, accident, or mistake is not shown. Robertson, Inc. v. Webster, 679 S.W.2d 683, 688 (Tex. App.—Houston [1st Dist.] 1984, no writ) (concluding oral agreement regarding time of delivery of pickup truck to customer was not inconsistent with terms of agreement between car dealer and customer, for purposes of determining whether dealer's false representations regarding the delivery date were actionable under the Deceptive Trade Practices - Consumer Protection Act, notwithstanding the presence of a merger clause in the sales order form, where the instrument itself referred to"delivery" numerous times and yet contained no delivery date).


ALSO RELEVANT: parol evidence rule, ambiguous vs. unambiguous contracts, definiteness of contractual terms