Paper Example on Parole Rule: Oral Negotiations Not Binding in Contract

Fact Scenario I

The parole rule prohibits the introduction of any oral negotiations that took place between two parties and is not included in the written contract from being part of the agreement.

Is your time best spent reading someone else’s essay? Get a 100% original essay FROM A CERTIFIED WRITER!

Save 25%

In the case of Winston and Monica, their oral negotiation indicated that Winston was interested in purchasing chickens, and Monica was to sell them to him. In their discussion, according to Winston specified that Monica would send him organic chickens. However, in their written contract, Winston does not specify the type of chickens that he wants, and the only thing included is the price. The contract specifies that Monica would send chickens worth $50,000. Legally, Monica is not bound to send the organic chicken to Winston since it is not specified in writing as required under the parole rule. The negotiation was an oral discussion that does not hold Monica liable since the parole rule is not part of the contract.

According to Epstein et al. (2014), parole rule cannot be applied in case of Fraud, coercion, or when a mutual mistake occurs. However, based on the reports in the case, there is no evidence that Monica committed neither Fraud, coerced Winston into signing the contract, or the mistake was mutual. Therefore, parole evidence would be applied. The parole rule also prevents extrinsic evidence made before the written agreement. The negotiation of organic chicken, in this case, is considered extrinsic evidence produced before the final contract was written. Therefore a third party cannot testify on behalf of Winston to interpret the terms of the contract.

Parole rule allows for an exception if the terms of the contract have not been specified. In this case, the written contract indicates that Monica is to send "chickens" to Winston but does not specify the type of chicken. If a third party was present during the negotiations, he or she could testify on Winston's behalf that the "chicken" in the contract meant organic chickens since Monica has various types of chickens.

Fact Scenario II

Part 1

Fraud refers to intentional misinformation of a material fact. There are four elements of Fraud that need to be affirmed in a case that is the information was made knowingly, intended to make the other party act, the other party acted on the misinformation, and the party is harmed.

In the case of Jennifer purchasing a car from Shania, she stated that she wanted to buy a car that was under 30 000 miles. Shania knowingly misinformed Jennifer that Honda Civic had 20 000 miles, yet she had altered it from 100,000 miles. Shania had material information that Jennifer would only purchase the car if it had less than 30000 miles. Therefore, her misstatement of the material facts was to lure Jennifer into buying the car. Jennifer bought the car based on the false information provided by Shania. After purchasing the car, it developed mechanical problems, thereby harming her. Based on the report, all four elements of Fraud are present in the case. Therefore, Jennifer can disaffirm the contract.

Part 2

Shania could use the "no breach excuse" legal excuse since a hurricane destroyed her inventory. The no breach excuse allows the promisor to make three types of excuses that is impossibility, impracticability, and frustration of purpose (Hoffman& Hwang, 2020). The impossibility approach is applicable if the unexpected event happened after the contract was signed, the occurrence of the event rendered the promisor performance impossible or impracticable, the risk of the event was allocated by custom or an agreement or the occurrence of the event was an underlying assumption made in the contract. In the case the non-breach excuse is applicable because the hurricane was unexpected, it rendered Shania impossible to sell the car. Neither party was responsible for its happening, and neither party would have entered into the contract if they knew the occurrence would happen.

Fact Scenario II

Part 1

According to Kim (2017), a contract is only enforceable by the law if the terms or the activities included are legal. Therefore, if the subject of a contract is illegal, it cannot be enforced. For an unlawful contract, the law does not provide for the remedy of restitution unless both parties to the contract entered knowingly. However, based on the facts contained in the case, Thrifty Consignment knew that the terms of the contract were illegal, but Faith did not. Thrifty Consignment signed the contract for dumping with Faith to avoid a citation. Therefore, Thrifty, which is the subject matter of the contract illegal, and thus, the contract was generally illegal. Consequently, Thrifty Consignment cannot legally enforce the contract with Faith.

Part 2

According to Kim (2017), if the subject matter in the contract is illegal, in this case, Thrifty Consignment, and uses illegal means to obtain a legal contract, it cannot be enforced by the court. Thrifty Consignment knew that it was illegal to dump in the area that they contracted Faith to do it for them. Faith was not aware that it was illegal when she was undertaking the task included in the contract. Therefore, the Thrifty Consignment benefited from the services rendered by Faith, and it would be unjust to deny paying her. It would be unfair to award restitution to a party that conferred benefits from another party without compensating the party even after retention of the benefit. The $ 2000 owed to Faith should be paid since Thrifty Consignment retained the benefits received before Faith learned that the contract is illegal.

References

Epstein, D. G., Archer, T., & Davis, S. (2014). Extrinsic Evidence, Parol Evidence, and the Parol Evidence Rule: A Call for Courts to Use the Reasoning of the Restatements Rather than the Rhetoric of Common Law. NML, Rev., 44, 49. https://heinonline.org/HOL/LandingPage?handle=hein.journals/nmlr44&div=6&id=&page=

Hoffman, D. A., & Hwang, C. (2020). The Social Cost of Contract. Available at SSRN 3635128. https://scholar.google.com/scholar?hl=en&as_sdt=0%2C5&q=Hoffman%2C+D.+A.%2C+%26+Hwang%2C+C.+%282020%29.+The+Social+Cost+of+Contract.+Available+at+SSRN+3635128.+&btnG=

Kim, N. S. (2017). Relative Consent and Contract Law. Nev. LJ, 18, 165. https://heinonline.org/HOL/LandingPage?handle=hein.journals/nevlj18&div=8&id=&page=