The parol evidence rule is not a rule of evidence, even though it governs admissibility of testimony

NATURE OF PAROL EVIDENCE RULES, EFFECT, AND POSSIBLE EXCEPTIONS 

The parol evidence rule is a rule of substantive law, not a rule of evidence. See Hubacek v. Ennis State Bank, 159 Tex. 166, 169, 317 S.W.2d 30, 31 (1958). When parties reduce an agreement to writing, the law of parol evidence presumes, in the absence of fraud, accident, or mistake, that any prior or contemporaneous oral or written agreements merged into the final written agreement. See DeClaire v. G&B McIntosh Family Ltd. P'ship, 260 S.W.3d 34, 45 (Tex. App.-Houston [1st Dist.] 2008, no pet.). Any provisions not set out in the writing are presumed to have been abandoned before execution of the agreement or, alternatively, they are presumed to have never been made. Id.

PAROL EVIDENCE TO BE DISREGARDED WHEN RULE APPLIES 

Evidence that violates the parol evidence rule has no legal effect and "merely constitutes proof of facts that are immaterial and inoperative." See Piper, Stiles & Ladd v. Fid. & Deposit Co. of Md., 435 S.W.2d 934, 940 (Tex. Civ. App.-Houston [1st Dist.] 1968, writ ref'd n.r.e.). Such evidence cannot be considered by the court when it construes the contract, even if the evidence is admitted without objection. See Johnson v. Driver, 198 S.W.3d 359, 364 (Tex. App.-Tyler 2006, no pet.).

WHAT EXCEPTIONS ARE THERE AND WHEN CAN THEY BE INVOKED? 

There are exceptions, however. Parol evidence may be admitted to show (1) that the contract was induced by fraud, accident, or mistake; (2) that an agreement was to become effective only upon certain contingencies; or (3) in the case of ambiguity, that the parties' true intentions differ from those expressed in the agreement. See Gonzalez v. United Bhd. of Carpenters & Joiners of Am., Local 551, 93 S.W.3d 208, 211 (Tex. App.-Houston [14th Dist.] 2002, no pet.).

Parol evidence may also be admitted under an additional exception to show collateral, contemporaneous agreements that are consistent with the underlying written agreement. See DeClaire, 260 S.W.3d at 45. However, this exception does not permit parol evidence that varies or contradicts the express or implied terms of the written agreement. Id.

SOURCE: HOUSTON COURT OF APPEALS - No. 14-13-00730-CV - 11/6/2014

ADDITIONAL CASELAW EXCERPT ON PAROL EVIDENCE RULE FROM CITED CASE: 

The parol evidence rule is a rule of substantive law. Hubacek v. Ennis State Bank, 159 Tex. 166, 317 S.W.2d 30, 31 (1958); Gonzalez v. United Bd. of Carpenters & Joiners, 93 S.W.3d 208, 211 (Tex. App.-Houston [14th Dist.] 2002, no pet.); Piper, Stiles & Ladd v. Fid. & Deposit Co., 435 S.W.2d 934, 940 (Tex.Civ.App.-Houston [1st Dist.] 1968, writ ref'd n.r.e.).

When parties reduce an agreement to writing, the law of parol evidence presumes, in the absence of fraud, accident, or mistake, that any prior or contemporaneous oral or written agreements merged into the written agreement and, therefore, that any provisions not set out in the writing were either abandoned before execution of the agreement or, alternatively, were never made and are thus excluded from consideration in interpreting the written agreement. See Hubacek, 317 S.W.2d at 31; Smith v. Smith, 794 S.W.2d 823, 827 (Tex.App.-Dallas 1990, no writ); Muhm v. Davis, 580 S.W.2d 98, 101 (Tex. Civ.App.-Houston [1st Dist.] 1979, writ ref'd n.r.e.). The terms of a promissory note cannot be contradicted or varied by parol evidence of a manner of payment other than as expressed in the note. Dameris v. Homestead Bank, 495 S.W.2d 52, 54 (Tex.Civ.App.-Houston [1st Dist.] 1973, no writ).

We review parol evidence questions de novo, as questions of law. City of Pasadena v. Gennedy, 125 S.W.3d 687, 691 (Tex.App.-Houston [1st Dist.] 2003, pet. denied). Evidence that violates the parol evidence rule has no legal effect and "merely constitutes proof of facts that are immaterial and inoperative." Piper, Stiles & Ladd, 435 S.W.2d at 940. Because all prior negotiations and agreements are presumed merged into the final agreement, parol evidence is not admissible to vary, alter, or supplement the terms of an otherwise unambiguous contract except to show (1) that the contract was induced by fraud, accident, or mistake; (2) that an agreement was to become effective only upon certain contingencies; or (3) in the case of ambiguity, that the parties' true intentions differ from those expressed in the agreement. See Messer v. Johnson, 422 S.W.2d 908, 912 (Tex.1968); Gonzalez, 93 S.W.3d at 211; Litton v. Hanley, 823 S.W.2d 428, 430 (Tex.App.-Houston [1st Dist.] 1992, no writ).

Parol evidence may also be admissible, under an additional exception, to show collateral, contemporaneous agreements that are consistent with the underlying agreement to be construed. See Hubacek, 317 S.W.2d at 31; see also Transit Enter., Inc. v. Addicks Tire & Auto Supply, Inc., 725 S.W.2d 459, 461 (Tex.App.-Houston [1st Dist.] 1987, no writ) (applying exception for collateral, consistent, contemporaneous agreements); Sherrod v. Bailey, 580 S.W.2d 24, 29 (Tex.Civ.App.-Houston [1st Dist.] 1979, writ ref'd n.r.e.) (same). But this latter exception does not permit parol evidence that varies or contradicts either the express terms or the implied terms of the written agreement. Hubacek, 317 S.W.2d at 31; Loe v. Murphy, 46*46 611 S.W.2d 449, 451-52 (Tex.Civ. App.-Dallas 1980, writ ref'd n.r.e.); NHA, Inc. v. Jones, 500 S.W.2d 940, 944-45 (Tex. Civ.App.-Fort Worth 1973, writ ref'd n.r.e.) (both citing Hubacek).

Under what circumstances is a contract construed as a matter of law, and extrinsic evidence precluded?

CONTRACT CONSTRUCTION AS A MATTER OF LAW 

If a written contract has a definite legal meaning, then a court should read the text and construe it as a matter of law without help from a jury. Frost Nat'l Bank v. L & F Distribs., Ltd., 165 S.W.3d 310, 312 (Tex. 2005) (per curiam); Coker v. Coker, 650 S.W.2d 391, 393 (Tex. 1983). When the words on the page suffice, a court should not look outside the document to decide what the parties agreed. J.M. Davidson, Inc. v. Webster, 128 S.W.3d 223, 229 (Tex. 2003). The overriding objective is to "ascertain and give effect to the parties' intentions as expressed in the document." Frost Bank, 165 S.W.3d at 311-12.

However, if a contract is ambiguous, the court should accept parol evidence and can empanel a jury to decide, as an issue of fact, the "true intent of the parties." Coker, 650 S.W.2d at 394-95. A contract is ambiguous if it is open to more than one reasonable reading. Frost Bank, 165 S.W.3d at 312. Deciding whether a contract is ambiguous is itself an issue of law for the court. Webster, 128 S.W.3d at 229.

To determine whether a contract is ambiguous, courts apply standard rules of interpretation. Frost Bank, 166 S.W.3d at 312. These rules require an attempt to harmonize the contract as a whole. Id. An ideal harmonization will not treat any clause as a nullity, and courts generally presume that every provision was intended to have some effect. Heritage Res., Inc. v. NationsBank, 939 S.W.2d 118, 121 (Tex. 1996). Words should be given their ordinary meaning unless it appears from context that they were used in a technical or different sense. Id. Courts should interpret contracts from a utilitarian perspective, keeping in mind the parties' business objectives. Frost Bank, 165 S.W.3d at 312. Absurd, inequitable, or oppressive interpretations are to be eschewed unless they prove unavoidable. Id.

SOURCE: HOUSTON COURT OF APPEALS - No. 01-12-00677-CV - 2/13/2014

The lease unambiguously does not require First Industrial to give Michelin advance notice of the amount of the policy's deductible. See R & P Enters. v. LaGuarta, Gavrel & Kirk, Inc., 596 S.W.2d 517, 519 (Tex. 1980) ("If a written instrument is so worded that a court may properly give it a certain or definite legal meaning or interpretation, it is not ambiguous."). As the contract is unambiguous, our determination of its meaning is a legal conclusion. See Frost Bank, 165 S.W.3d at 312. The trial court correctly disregarded the jury's findings and entered judgment in favor of First Industrial.

ADDITIONAL CASE

See Gilbert Tex. Contr., L.P. v. Underwriters at Lloyd's London, 327 S.W.3d 118, 133 (Tex. 2010) ("If a contract as written can be given a clear and definite legal meaning, then it is not ambiguous as a matter of law.").

Legal instruments (notes, contracts) and the parol evidence rule

   
The nature of the parol evidence rule

   

The parol evidence rule functions to make the instrument sued on the sole repository of the legal transaction. Lawrence Gen. Corp. v. Anchor Post Prod. of Tex., Inc., No. 05-95-01771-CV, 1997 WL 78913 at *2 (Tex. App.-Dallas Feb. 26, 1997, no writ) (not designated for publication). In other words, the terms of the transaction must be derived from the writing alone. 

Where the instrument sued on is a professedly partial or incomplete agreement, however, the rule excluding parol evidence does not apply. Id.; see also Garner v. Redeaux, 678 S.W.2d 124, 128 (Tex. App.-Houston [14th Dist.] 1984, writ ref'd n.r.e.). An instrument is incomplete when it refers to terms or understandings not embraced in its provisions. Lawrence Gen. Corp., 1997 WL 78913 at *2.

SOURCE:  DALLAS COURT OF APPEALS -  No. 05-11-01536-CV - 6/7/2013 

Also see Anglo-Dutch Petroleum Int'l,352 S.W.3d at 451; Baroid Equip., Inc. v. Odeco Drilling, Inc., 184 S.W.3d 1, 13 (Tex. App.-Houston [1st Dist.] 2005, pet. denied) ("The parol evidence rule is not a mere rule of evidence, but a rule of substantive contract law. . . . Evidence violating the parol evidence rule has no legal effect and merely constitutes proof of facts that are immaterial and inoperative."). But the parol evidence rule

does not prohibit consideration of surrounding circumstances that inform, rather than vary from or contradict, the contract text. Those circumstances include . . . the commercial or other setting in which the contract was negotiated and other objectively determinable factors that give a context to the transaction between the parties.

Houston Exploration Co. v. Wellington Underwriting Agencies, Ltd., 352 S.W.3d 462, 469 (Tex. 2011) (internal citations omitted).

Testimony, affidavit about contract likely useless in court if it violates the Parol Evidence Rule

Parol Evidence Rule

Parol evidence may not be used to vary or contradict the express or implied terms of an unambiguous written agreement absent a showing of fraud, accident, or mutual mistake. Toler v. Sanders, 371 S.W.3d 477, 481 (Tex. App.-Houston [1st Dist.] 2012, no pet.); Hudson Buick, Pontiac, GMC Truck Co. v. Gooch, 7 S.W.3d 191, 198 (Tex. App.-Tyler 1999, pet. denied). Evidence admitted in violation of the parol evidence rule is incompetent and without any probative force. Johnson v. Driver, 198 S.W.3d 359, 364 (Tex. App.-Tyler 2006, no pet.).

SOURCE: HOUSTON COURT OF APPEALS – 14-11-00895-CV – 4/30/2013

Whatever the contract says will likely be what matters

But I thought ... bla, bla.
But it was my understanding ... yada, yada... 

Express contract controls over implied contract claim and claim that terms were orally modified where express contract contained integration clause and barred parol evidence inconsistent with the terms stated in the written (fee) agreement.   

EXPRESS CONTRACT TAKES PRECEDENCE  

"If the parties have expressly stated the terms of their agreement, they have created an express contract and are bound by it to the exclusion of conflicting implied terms." Malallah v. Noble Logistic Servs., Inc., No. 14-08-01030-CV, 2010 WL 343487, at *2, (Tex. App.-Houston [14th Dist.] Feb. 2, 2010, pet. denied) (quoting Emmer v. Phillips Petroleum Co., 668 S.W.2d 487, 490 (Tex. App.-Amarillo 1994, no writ)) (internal quotation marks omitted); see also David J. Sacks, P.C. v. Haden, 266 S.W.3d 447, 450 (Tex. 2008) (per curiam) (declining to hold that a written attorney-fee agreement which specified only hourly rates may be modified by evidence of an oral capping agreement).

SOURCE: HOUSTON COURT OF APPEALS - 14-12-00088-CV – 3/14/2013 

 

 

Real Estate Transactions: What degree of specificity is required to satisfy the statute of frauds?

  
STATUTE OF FRAUDS GOVERNING CONVEYANCE OF REAL ESTATE, PURCHASE-OPTION CONTRACTS
 

Under the applicable statute of frauds, a contract for the sale of real estate is not enforceable unless it, or a memorandum of it, is in writing and signed by the person to be charged with the contract.  Tex. Bus. & Com. Code Ann. § 26.01(a), (b)(4) (Vernon 2009).  For a contract concerning the conveyance of real estate to satisfy the statute of frauds, “the writing must furnish within itself, or by reference to some other existing writing, the means or data by which the particular land to be conveyed may be identified with reasonable certainty.”  Wilson v. Fisher, 188 S.W.2d 150, 152 (Tex. 1945).  This applies to a purchase option in a contract.  See Matney v. Odom, 210 S.W.2d 980, 981–82 (Tex. 1948) (applying statute of frauds analysis to purchase option in contract).  Whether a contract falls within the statute of frauds is a question of law.  Iacono v. Lyons, 16 S.W.3d 92, 94 (Tex. App.—Houston [1st Dist.] 2000, no pet.).

  

The purpose of a description in a written conveyance is not to identify the land, but to afford a means of identification.  Jones v. Kelley, 614 S.W.2d 95, 99–100 (Tex. 1983).  While we apply a strict application of the statute of frauds, we allow for a liberal construction of the words describing the land.  Gates v. Asher, 280 S.W.2d 247, 248 (Tex. 1955).   

  

A metes-and-bounds description is not required to satisfy the statute of frauds.  Tex. Builders v. Keller, 928 S.W.2d 479, 481 (Tex. 1996).  Similarly, a plat in a recorded property description is not required.  Nguyen v. Yovan, 317 S.W.3d 261, 269 (Tex. App.—Houston [1st Dist.] 2009, pet. denied).  Nor does the description of the property require “[c]onviction beyond all peradventure of doubt.”  Gates, 280 S.W.2d at 249; see also Templeton v. Dreiss, 961 S.W.2d 645, 659 (Tex. App.—San Antonio 1998, pet. denied) (holding mathematical certainty not required).  Instead, only proof within “reasonable certainty” is required.  Gates, 280 S.W.2d at 249.

  

“If enough appears in the description so that a party familiar with the locality can identify the premises with reasonable certainty, it will be sufficient.”  Id. at 248–49.  Generally speaking, a property can be identified with reasonable certainty if it identifies the general area of the land and “contains information regarding the size, shape, and boundaries.”  Reiland v. Patrick Thomas Props., Inc., 213 S.W.3d 431, 437 (Tex. App.—Houston [1st Dist.] 2006, pet. denied); accord Fears v. Tex. Bank, 247 S.W.3d 729, 736 (Tex. App.—Texarkana 2008, pet. denied).

  

“[W]hen construing a conveyance, the court does not look at terms in isolation; rather, it must give effect to all parts of the conveyance and construe the document as a whole.”  Plainsman Trading Co. v. Crews, 898 S.W.2d 786, 789 (Tex. 1995).  When a contract includes a map of the property to be conveyed as a part of its description of the property, this is included in the analysis of whether the description satisfies the statute of frauds.  Matney, 210 S.W.2d at 984; U.S. Enters., Inc. v. Dauley, 535 S.W.2d 623, 628 (Tex. 1976).  “Whether a map is helpful in remedying descriptive defects of the contract depends on whether the missing details are shown on the map.”  U.S. Enters., 535 S.W.2d at 628.

   

While parol evidence may be considered under certain circumstances, it cannot be used to supply the “essential elements” of the contract.  Wilson, 188 S.W.2d at 152.  In contrast, it can be used to “explain or clarify the essential terms appearing in the” contract.  Id. 

   

If it does not sufficiently describe the land to be conveyed, a conveyance of an interest in real property is void and unenforceable under the statute of frauds.  Nguyen, 317 S.W.3d at 267.

SOURCE: HOUSTON COURT OF APPEALS – NO. 01-11-00328-CV   -- 4/19/12

(“The property description contained with the sublease is not so vague or ambiguous as to render its boundaries indeterminable.  Additionally, the record shows that a surveyor, using the information contained in or referenced by the sublease, was able to identify the property with reasonable certainty.  Accordingly, we hold that the trial court erred by determining, as a matter of law, that the property subject to the sublease’s purchase option could not be identified with a reasonable certainty.”) 

Deed construction analogous to contract construction; so is admissibility of parol evidence to interpret or clarify deed

 
CONSTRUCTION OF A DEED - A LEGAL QUESTION, RATHER THAN A TRIABLE ISSUE OF FACT, BUT THERE MAY BE EXCEPTIONS
     
The construction of a deed is ordinarily a question of law. See Terrill v. Tuckness, 985 S.W.2d 97, 101 (Tex. App.—San Antonio 1998, no pet.) (noting that rules of contract construction ordinarily apply to construction of deeds). Our primary concern in construing a deed is to ascertain the parties’ true intent as expressed in the instrument. Luckel v. White, 819 S.W.2d 459, 461 (Tex. 1991); CenterPoint Energy Houston Elec., L.L.P. v. Old TJC Co., 177 S.W.3d 425, 430 (Tex. App.—Houston [1st Dist.] 2005, pet. denied). “Because ‘once a dispute arises over meaning, it can hardly be expected that the parties will agree on what meaning was intended,’ courts use canons of construction to help ascertain the parties’ intent.” French v. Chevron U.S.A., Inc., 896 S.W.2d 795, 797 (Tex. 1995) (quoting Southland Royalty Co. v. Pan Am. Petroleum Corp., 378 S.W.2d 50, 59 (Tex. 1964) (Calvert, C.J., concurring)). The “four corners” rule requires us to ascertain intent from the entire instrument. See French, 896 S.W.2d at 797. We must strive to harmonize all of the deed’s parts, construing the deed to give effect to all of its provisions. Luckel, 819 S.W.2d at 462; CenterPoint Energy, 177 S.W.3d at 430.

PAROL EVIDENCE RULE GENERALLY APPLIES UNLESS THERE IS AMBIGUITY

Extrinsic evidence of intent is admissible only if the deed is ambiguous on its face. See Friendswood Dev. Co. v. McDade & Co., 926 S.W.2d 280, 283 (Tex. 1996); CenterPoint Energy, 177 S.W.3d at 431 (“A court may consider the parties’ interpretations of the contract through extrinsic or parol evidence only after a contract is first determined to be ambiguous.”).

The decision whether the deed is ambiguous is also a question of law. See J.M. Davidson, Inc. v. Webster, 128 S.W.3d 223, 229 (Tex. 2003); see also CenterPoint Energy, 177 S.W.3d at 430. To make this determination, we look at the deed as a whole in light of the circumstances existing when the parties entered into their agreement. See CenterPoint Energy, 177 S.W.3d at 430. If the deed is worded in such a way that it can be given a definite or certain legal meaning, then it is not ambiguous and the court will be confined to the writing. See id. at 30-31. A mere disagreement about the proper interpretation of a deed, however, does not make the deed ambiguous; the instrument is ambiguous only if, after application of the rules of construction, the deed is reasonably susceptible to more than one meaning. Brown v. Havard, 593 S.W.2d 939, 942 (Tex. 1980); Universal C.I.T. Credit Corp. v. Daniel, 243 S.W.2d 154, 157 (Tex. 1951).

SOURCE: HOUSTON COURT OF APPEALS - 01-10-01002-CV - 12/15/11

Whether a contract is clear or ambiguous makes a difference when it comes to litigation

   
The question whether there is ambiguity in contractual language impacts the admissibility of evidence outside the contract itself, which could otherwise not be considered under the parol [not parole] evidence rule. But often the parties disagree on whether ambiguity exists and the judge must make the call.
  

CONTRACT AMBIGUITY – OR ABSENCE THEREOF -- AND ITS IMPLICATIONS

  

Whether an agreement is ambiguous is a question of law for the court to decide by looking at the contract as a whole in light of the circumstances existing at the time the contract was entered. Coker v. Coker, 650 S.W.2d 391, 394 (Tex. 1983); Ganske v. Spence, 129 S.W.3d 701, 707 (Tex. App.—Waco 2004, no pet.).

  

An ambiguity does not arise simply because the parties interpret the contract differently. Seagull Energy E & P, Inc. v. Eland Energy, 207 S.W.3d 342, 345 (Tex. 2006); Lopez v. Munoz, Hockema & Reed, L.L.P., 22 S.W.3d 857, 861 (Tex. 2000). A contract is ambiguous when its meaning is uncertain and doubtful or is reasonably susceptible to more than one interpretation. Eland Energy, 207 S.W.3d at 345.

 
If the agreement can be given a certain or definite legal meaning or interpretation, it is not ambiguous, and we will construe it as a matter of law. Coker, 650 S.W.2d at 393. Moreover, a court will not change a contract merely because the court or one of the parties comes to dislike its provisions or thinks that something else is needed. Calpine Producer Servs., L.P. v. Wiser Oil Co., 169 S.W.3d 783, 787 (Tex. App.—Dallas 2005, no pet.).
 
We are not allowed to rely on parol evidence to ascertain the meaning of an unambiguous agreement. See Nat’l Union Fire Ins. Co. v. CBI Indus., Inc., 907 S.W.2d 517, 520 (Tex. 1995) (“Parol evidence is not admissible for the purpose of creating an ambiguity. Only where a contract is first determined to be ambiguous may the courts consider the parties’ interpretation . . . and admit extraneous evidence to determine the true meaning of the instrument.”).

SOURCE: WACO COURT OF APPEALS - 10-11-00257-CV – 12/7/11
RELATED LEGAL TERMS: contract construction, contract interpretation, ambiguous vs. unambiguous contractual provisions, parol evidence rule, 4-corners rule

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).

INCOMPLETE CONTRACT EXCEPTION

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).

SOURCE: CORPUS CHRISTI / EDINBURG COURT OF APPEALS - 13-08-00263-CV - 10/20/11

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

Can oral testimony be offered to interpret a contract?

Is oral testimony permitted to aid court's interpreting a contract?

THE ROLE OF PAROL/EXTRINSIC EVIDENCE IN CONTRACT INTERPRETATION

Although extrinsic evidence is generally not admissible to vary the terms of an unambiguous agreement, extrinsic evidence may "be admissible to give the words of a contract a meaning consistent with that to which they are reasonably susceptible, i.e., to 'interpret' contractual terms." Mescalero Energy, Inc. v. Underwriters Indem. General Agency, Inc., 56 S.W.3d 313, 320 (Tex. App. - Houston [1st Dist.] 2001, pet. denied) (quoting National Union Fire Ins. Co. v. CBI Indus., Inc., 907 S.W.2d 517, 521 (Tex. 1995)).

And expert testimony may be useful in explaining the commonly understood meaning in the industry of a specialized term. Mescalero, 56 S.W.3d at 320.

In medical cases, the general rule is that expert testimony is necessary to establish causation as to medical conditions laying outside the common knowledge and experience of jurors. Guevara v. Ferrer, 247 S.W.3d 662, 665 (Tex. 2007).

SOURCE: El Paso Court of Appeals - 08-10-00160-CV - 8/10/11

More Lawyer Lingo: The Parol Evidence Rule - No, not that kind of parole ...

 
THE PAROL EVIDENCE RULE

 
-- Nota bene:  it's not spelled parole - No 'e' at the end

 
“The parol evidence rule provides that the terms of a written contract cannot be contradicted by evidence of an earlier, inconsistent agreement.” Baroid Equip., Inc. v. Odeco Drilling, Inc., 184 S.W.3d 1, 13 (Tex. App.—Houston [1st Dist.] 2005, pet. denied). The application of the parol evidence rule is a question of law that we review de novo. DeClaire v. G & B McIntosh Family Ltd., 260 S.W.3d 34, 45 (Tex. App.—Houston [1st Dist.] 2008, no pet.). The rule particularly applies when the written contract includes a merger clause or similar language. Baroid Equip., 184 S.W.3d at 13.

We may consider parol evidence, however, “to show want or failure of consideration, and to establish the real consideration given for an instrument.” DeLuca v. Munzel, 673 S.W.2d 373, 376 (Tex. App.—Houston [1st Dist.] 1984, writ ref’d n.r.e.). See also RESTATEMENT (SECOND) OF CONTRACTS §§ 213 cmt. d, 214(d) (1981). We may consider parol evidence to determine if consideration exists “even though the parties have reduced their agreement to a writing which appears to be a completely integrated agreement.” RESTATEMENT (SECOND) OF CONTRACTS § 218(2).

We may also consider parol evidence to determine whether the parties intended a written agreement as a memorialization of their agreement (and therefore only had one contract) or a modification of the prior oral contract (and therefore had two contracts, each of which needed independent consideration as discussed below). See id. at § 210(3) (“Whether an agreement is completely or partially integrated is to be determined by the court as a question preliminary to determination of a question of interpretation or to application of the parol evidence rule.”); Mark K. Glasser & Keith A. Rowley, On Parol: The Construction and Interpretation of Written Agreements and the Role of Extrinsic Evidence in Contract Litigation, 49 BAYLOR L. REV. 657, 705–707 (1997).

SOURCE: Houston Court of Appeals - 01-10-00489-CV - 7/28/11

Does the Statute of Frauds apply? - Selling of real estate vs. lease contract

STATUTE OF FRAUDS: Contract for sale of real property vs. lease contract While a contract for the sale of real property becomes invalid under the statute of frauds if there is an invalid legal description of the property, see Jones v. Kelley, 614 S.W.2d 95, 99 (Tex. 1981); Republic Nat'l Bank of Dallas v. Stetson, 390 S.W.2d 257, 261 (Tex. 1965); Nguyen v. Yovan, 317 S.W.3d 261, 267 (Tex. App.--Houston [1st Dist.] 2009, pet. filed), a contract for the lease of the property does not necessarily become invalid under the same circumstances. Rather, when a contract for the lease of property is ambiguous, extraneous evidence is admissible to determine the meaning of the contract. See Towers of Tex., Inc. v. J & J Sys., Inc., 834 S.W.2d 1, 2 (Tex. 1992) (trial court did not err in deeming property description in lease ambiguous and considering further evidence to resolve the issue); United Interests, Inc. v. Brewington, Inc., 729 S.W.2d 897, 903 (Tex. App.--Houston [14th Dist.] 1987, writ ref'd n.r.e.) (trial court did not err in determining that certain paragraphs in sublease were ambiguous and then admitting parole evidence to determine parties' intent). SOURCE: Austin Court of Appeals - 03-09-00713-CV - 6/3/11 RELATED LEGAL CONCEPTS: admissibility of parol evidence, extraneous extrinsic evidence, testimony

Interpreting the fine print: Is the contractual language clear or ambiguous?

How do Texas courts deal with the contention that a contract is ambiguous? 

Whether a contract is ambiguous is a question of law. Heritage Resources, Inc. v. NationsBank, 939 S.W.2d 118, 121 (Tex. 1996). If the contract is so worded that it can be given a certain or definite legal meaning or interpretation, then it is not ambiguous and a court should construe the contract as a matter of law. SAS Institute, Inc. v. Breitenfeld, 167 S.W.3d 840, 841 (Tex. 2005); ACS Investors, Inc. v. McLaughlin, 943 S.W.2d 426, 430 (Tex. 1997). [ The court construes ] an unambiguous contract according to the plain meaning of its express wording. Lyons v. Montgomery, 701 S.W.2d 641, 643 (Tex. 1985). Unambiguous contracts are enforced as written. Heritage Resources, Inc., 939 S.W.2d at 121.
 
WHAT MAKES A CONTRACT AMBIGUOUS?

 “A contract is ambiguous when its meaning is uncertain and doubtful or is reasonably susceptible to more than one interpretation.” Id. However, a contract is ambiguous when its meaning is uncertain and doubtful or it is reasonably susceptible to more than one meaning. Nevarez v. Ehrlich, 296 S.W.3d 738, 742 (Tex.App.--El Paso 2009, no pet.). Not every difference in the interpretation of a contract amounts to an ambiguity. Forbau v. Aetna Life Ins. Co., 876 S.W.2d 132, 134 (Tex. 1994). Mere disagreement over the meaning of a provision in the contract does not make the terms ambiguous. Richardson Lifestyle Association v. Houston, 853 S.W.2d 796, 800 (Tex.App.--Dallas 1993, writ denied).

Likewise, uncertainty or lack of clarity in the language chosen by the parties is insufficient to render a contract ambiguous. Preston Ridge Fin. Servs. Corp. v. Tyler, 796 S.W.2d 772, 777 (Tex.App.--Dallas 1990, writ denied). Whether a contract is ambiguous is a question of law for the court to decide by looking at the contract as a whole in light of the circumstances present when the contract was entered. Coker v. Coker, 650 S.W.2d 391, 394 (Tex. 1983).
 
When a contract contains an ambiguity, the granting of a motion for summary judgment is improper because the interpretation of the instrument becomes a fact issue. Id. We determine whether a contract is ambiguous by looking at the contract as a whole in light of the circumstances present when the parties entered the contract. Universal Health Servs., Inc. v. Renaissance Women’s Group, P.A., 121 S.W.3d 742, 746 (Tex. 2003). If a contract is determined to be ambiguous, then a court may consider extraneous evidence to ascertain the true meaning of the instrument. Nat’l Union Fire Ins. Co. v. CBI Indus., Inc., 907 S.W.2d 517, 520 (Tex.1995).
 
TWO CATEGORIES OF CONTRACT AMBIGUITY

An ambiguity may be either patent or latent. Id. A patent ambiguity is evident on the face of the contract. Id. A latent ambiguity arises when a contract that is unambiguous on its face is applied to the subject matter with which it deals and an ambiguity appears by reason of some collateral matter. Id. When a contract contains an ambiguity, either patent or latent, the interpretation of the instrument becomes a fact issue. Coker, 650 S.W.2d at 394; Quality Infusion Care, Inc. v. Health Care Service Corp., 224 S.W.3d 369, 379 (Tex.App.--Houston [1st Dist.] 2006, no pet.). The trier of fact [ jury or judge in bench trial ] must resolve the ambiguity by determining the true intent of the parties. Coker, 650 S.W.2d at 394-95.
 
SOURCE: El Paso Court of Appeals - 08-08-00343-CV - 4/20/11

Unambiguous Contract enforced as written

CONTRACT CONSTRUCTION PRINCIPLES: AMBIGUOUS VS. UNAMBIGUOUS CONTRACT LANGUAGE
 
Unambiguous Contract given effect & enforced as written: as a matter of law 

The interpretation of an unambiguous contract is a question of law for the court. MCI Telecomms. Corp. v. Tex. Utils. Elec. Co., 995 S.W.2d 647, 650-51 (Tex. 1999). The court's primary concern in interpreting a written contract is to determine the mutual intent of the parties as manifested in the contract. Coker v. Coker, 650 S.W.2d 391, 393 (Tex. 1983). The parties' intent must be taken from the agreement, and the agreement must be enforced as written. Wells Fargo Bank, Minn., N.A. v. N. Cent. Plaza I, L.L.P., 194 S.W.3d 723, 726 (Tex. App.-Dallas 2006, pet. denied). We favor an interpretation that affords some consequences to each part of the agreement so that none of the provisions will be rendered meaningless. Coker, 650 S.W.2d at 394. Unless the agreement shows that the parties used a term in a technical or different sense, we give the terms their plain, ordinary, and generally accepted meaning. Heritage Res., Inc. v. NationsBank, 939 S.W.2d 118, 121 (Tex. 1996). Under generally accepted principles of contract interpretation, all writings that pertain to the same transaction will be considered together, even if they were executed at different times and do not expressly refer to one another. DeWitt Cnty. Elec. Co-op., Inc. v. Parks, 1 S.W.3d 96, 102 (Tex. 1999). This rule, however, is a device for ascertaining and giving effect to the intention of the parties and cannot be applied arbitrarily. Id. 
 
SOURCE: Dallas Court of Appeals - 05-09-00586-CV - 5/18/11

May Parol Evidence be considered in interpreting a contract?

CONTRACT CONSTRUCTION AND THE PAROL EVIDENCE RULE When is parol evidence [verbal, oral, affidavit testimony] proper in contract construction? The construction of an unambiguous contract is a question of law for the court to determine. MCI Telecomms. Corp. v. Tex. Util. Elec. Co., 995 S.W.2d 647, 650 (Tex. 1999). An unambiguous contract will be enforced as written, and parol evidence will not be received for the purpose of creating an ambiguity or to give the contract a meaning different from that which its language imports. David J. Sacks, P.C. v. Haden, 266 S.W.3d 447, 450 (Tex. 2008) (citing Universal C.I.T. Credit Corp. v. Daniel, 243 S.W.2d 154, 157 (Tex. 1951)). What is the role of extraneous evidence (outside the four corners of the contract)? Only where a contract is ambiguous may a court consider the parties’ interpretation and admit extraneous evidence to determine the true meaning of the instrument. Haden, 266 S.W.3d at 450 (citing Nat'l Union Fire Ins. Co. v. CBI Indus., Inc., 907 S.W.2d 517, 520 (Tex.1995)). SOURCE: Houston Court of Appeals - 01-09-00856-CV – 5/19/11 RELATED TERMS AND PHRASES: contract interpretation, construction, enforcement - parol [ not parole ] evidence rule - not the best evidence objection - explaining what the contract language means

Contract construction: Lack of ambiguity precludes use of parol evidence to explain "what contract really meant"

CONTRACT CONSTRUCTION -- PRINCIPLES OF INTERPRETATION

Ambiguity of contract or otherwise determined as a question of law

The construction and meaning of an unambiguous contract is a question of law. Calpine Producer Servs., L.P. v. Wiser Oil Co., 169 S.W.3d 783, 787 (Tex. App.-Dallas 2005, no pet.). The question of whether a contract is ambiguous is also a question of law, which the court must decide “by looking at the contract as a whole in light of the circumstances present when the contract was entered.” Coker v. Coker, 650 S.W.2d 391, 394 (Tex. 1983). “If the written instrument is so worded that it can be given a certain or definite legal meaning or interpretation, then it is not ambiguous . . . .” Id. at 393.

When is a contract (not) ambiguous?

“A contract is ambiguous when its meaning is uncertain and doubtful or is reasonably susceptible to more than one interpretation.” Las Colinas Obstetrics-Gynecology- Infertility Ass'n, P.A. v. Villalbe, 324 S.W.3d 634, 640 (Tex. App.-Dallas 2010, no pet.). “An ambiguity does not arise simply because the parties advance conflicting interpretations of the contract.” Columbia Gas Transmission Corp. v. New Ulm Gas, Ltd., 940 S.W.2d 587, 589 (Tex. 1996). “For an ambiguity to exist, both interpretations must be reasonable.” Id. (emphasis original).

Intent of contracting parties – How is it determined?

“In construing a written contract, the primary concern of the court is to ascertain the true intentions of the parties as expressed in the instrument.” Coker, 650 S.W.2d at 393. “The court should consider that the 'intent of the parties must be taken from the agreement itself, not from the parties' present interpretation, and the agreement must be enforced as written.'” Calpine Producer Serv., 169 S.W.3d at 787 (quoting Parts Indus. Corp. v. A.V.A. Servs., Inc., 104 S.W.3d 671, 678 (Tex. App.-Corpus Christi 2003, no pet.). Under the “Four Corners Rule,” the parties intent must “be ascertained from the instrument as a whole and not from isolated parts thereof.” Id. “[C]ourts should examine and consider the entire writing in an effort to harmonize and give effect to all the provisions of the contract so that none with be rendered meaningless.” Coker, 650 S.W.2d at 393 (emphasis original).

No testimony to be permitted regarding contract’s meaning when it is unambiguous

Furthermore, “[w]hen the contract is unambiguous, the court should apply the pertinent rules of construction, [and] apply the plain meaning of the contract language . . . .” Calpine Producer Servs., 169 S.W.3d at 787. We do not consider parol evidence when reviewing unambiguous contracts. See Stewman Ranch, Inc. v. Double M. Ranch, Ltd., 192 S.W.3d 808, 810 (Tex. App.-Eastland 2006, pet. denied) (citing Middleton v. Broussard, 504 S.W.2d 839 (Tex. 1974)).

SOURCE: Dallas Court of Appeals - 05-09-01472-CV - 5/2/11

LEGAL TERMS: ambiguous vs. unambiguous contract, contract construction and enforcement, parol [not parole] evidence rule

Integration Clause: Purpose and Effect of Merger Clause in Contracts

"ENTIRE AGREEMENT" CLAUSE & THE PAROL EVIDENCE RULE The purpose of an integration clause is to invoke the parol evidence rule when appropriate. Burleson State Bank v. Plunkett, 27 S.W.3d 605, 615 (Tex. App.-Waco 2000, pet. denied). An unambiguous contract will be enforced as written, and parol evidence will not be received for the purpose of creating an ambiguity or to give the contract a meaning different from that which its language imparts. See David J. Sacks, P.C. v. Haden, 266 S.W.3d 447, 450 (Tex. 2008). SOURCE: 13-08-00264-CV (Thirteenth Court of Appeals) (November 12, 2009) (agreement contained an integration clause, providing that the written agreement constituted the entire agreement between the parties)

Ambiguous vs. Unambiguous Contract: Implications for Summary Judgment, Admissibility of Extrinsic, Parol Evidence

WHEN IS A CONTRACT AMBIGUOUS / UNAMBIGUOUS? A contract is unambiguous if it can be given a definite legal meaning; if it is subject to two or more reasonable interpretations, it is ambiguous, creating a fact issue on the parties' intent. Webster, 128 S.W.3d at 229; Lopez v. Munoz, Hockema & Reed, L.L.P., 22 S.W.3d 857, 861 (Tex. 2000). Lack of clarity, however, does not necessarily create an ambiguity, and neither does a mere disagreement between the parties. See Universal Health Servs., Inc. v. Renaissance Women's Group, P.A., 121 S.W.3d 742, 746 (Tex. 2003) (adding that whether "a contract is ambiguous is a question of law that must be decided by examining the contract as a whole in light of the circumstances present when the contract was entered"); see also City of The Colony v. N. Tex. Mun. Water Dist., 272 S.W.3d 699, 722 (Tex. App.- Fort Worth 2008, pet. filed) (explaining that when "the meaning of a contract is unambiguous, a party's construction is immaterial"). Question of Law vs. Question of Fact When a contract contains an ambiguity, the granting of a motion for summary judgment is improper because the interpretation of the instrument becomes a fact issue. Coker v. Coker, 650 S.W.2d 391, 394 (Tex. 1983). Conversely, the interpretation of an unambiguous contract is a matter of law to be determined by the trial court. Gulf Ins. Co. v. Burns Motors, Inc., 22 S.W.3d 417, 423 (Tex. 2000). Effect of Contract Ambiguity (or Absence thereof) on Admissibility of Extrinsic Evidence / Parol Evidence In its second issue, Vineyard argues that the trial court erred by sustaining Univest's general objection to the purported parol evidence testimony of Collins and by excluding portions of Collins's affidavit because Collins's testimony met the admissibility requirements under the rules of evidence and common law. However, because we have concluded that the terms in the REA are not ambiguous, we must overrule Vineyard's evidentiary issues. See Fiess v. State Farm Lloyds, 202 S.W.3d 744, 747 (Tex. 2006) (recognizing that if the agreement is not ambiguous, courts do not consider extrinsic evidence when interpreting the agreement). Accordingly, we overrule Vineyard's second issue. SOURCE: 02-08-00496-CV (10/1/09) (Fort Worth Court of Appeals)

The Parol Evidence Rule: Not just a rule about admissibility of testimony, extraneous evidence

THE NATURE OF THE PAROL (NOT PAROLE) EVIDENCE RULE The parol evidence rule is a rule of substantive contract law, not evidence. Hubacek v. Ennis State Bank, 159 Tex. 166, 317 S.W.2d 30, 31 (1958); DeClaire v. G & B McIntosh Family Limited Partnership, 260 S.W.3d 34, 45 (Tex.App.--Houston [1st Dist.] 2008, no pet. h.). STANDARD OF REVIEW ON APPEAL We review parol evidence questions de novo, as questions of law. DeClaire, 260 S.W.3d at 45. PAROL EVIDENCE AND INTERGRATION OR MERGER CLAUSE IN CONTRACT When the parties have concluded a valid, integrated agreement, the parol evidence rule precludes enforcement of a prior or contemporaneous inconsistent agreement. Edascio, L.L.C. v. NextiraOne L.L.C., 264 S.W.3d 786, 796 (Tex.App.--Houston [1st Dist.] 2008, pet. filed); ISG State Operations, Inc. v. National Heritage Insurance Company, 234 S.W.3d 711, 719 (Tex.App.--Eastland 2007, pet. denied). The execution of a written contract presumes that all prior negotiations and agreements relating to the transaction have been merged into the written contract. Edascio, 264 S.W.3d at 796; ISG State Operations, 234 S.W.3d at 719. Consequently, the agreement will be enforced as written and cannot be added to, varied, or contradicted by parol evidence. Edascio, 264 S.W.3d at 796; ISG State Operations, 234 S.W.3d at 719. The parol evidence rule is particularly applicable when the written contract contains a recital that it contains the entire agreement between the parties or a similarly-worded merger provision. Edascio, 264 S.W.3d at 796. Evidence that violates the rule is incompetent and without probative force, and cannot properly be given legal effect. Garner v. Fidelity Bank, N.A., 244 S.W.3d 855, 859 (Tex.App.--Dallas 2008, no pet.). Parol evidence may be admissible to show collateral, contemporaneous agreements that are consistent with the underlying agreement. Gary E. Patterson & Associates, P.C. v. Holub, 264 S.W.3d 180, 197 (Tex.App.--Houston [1st Dist.] 2008, pet. denied); DeClaire, 260 S.W.3d at 45. But this exception does not permit parol evidence that varies or contradicts either the express terms or the implied terms of the written agreement. Gary E. Patterson, 264 S.W.3d at 197; DeClaire, 260 S.W.3d at 45. A collateral agreement is one the parties might naturally make separately, i.e., one not ordinarily expected to be embodied in, or integrated with the written agreement and not so clearly connected with the principal transaction as to be part and parcel of it. Garner, 244 S.W.3d at 859. An agreement is integrated if the parties intended a writing to be a final and complete expression of agreed terms. Morgan Buildings and Spas, Inc. v. Humane Society of Southeast Texas, 249 S.W.3d 480, 486 (Tex.App.--Beaumont 2008, no pet.). The inclusion of a merger or integration clause does not conclusively establish that the written contract is fully integrated. Id. A fully integrated written agreement is a final and complete expression of all the terms agreed upon by the parties. Id. A partially integrated agreement is a final and complete expression of all the terms addressed in that written agreement, but is not a final and complete expression of all the terms the parties have agreed upon. Id. A court considers the surrounding circumstances in determining whether, and to what degree, an agreement is integrated. Id. SOURCE OF ALL SNIPPETS: 08-07-00071-CV (7/29/09)