When it comes to business agreements, it is important to include each and every term in your written contract. While invoices, sales slips, checks, proposals, emails and even texts can create a contract, once you have a written contract that is signed by the parties, those other written documents may become parol (oral) evidence and are no longer part of your legally binding agreement. This is the legal concept called the Parol Evidence Rule aka the Four Corners Rule. If the Parol Evidence Rule applies, once an agreement has been reduced to a written contract, only the terms contained within the 4 corners of the signed contract would be considered by the court. (Back in the day, we used to print our contracts on paper, but the same concept applies today to DocuSign, scanned, faxed and even documents with e-signatures!)
Oral Agreements
Oral agreements (even those reduced to writing) that are not included in the written contract are not admissible in court. Know the terms of your contract. Terms outside the 4 corners will not be considered by a judge without convincing him/her to find and apply an exception to the Parol Evidence Rule such as mistake, clerical error, fraud, misrepresentation, duress and in some instances, ambiguity. If you are concerned about conducting business without a sufficient contract or have a contract dispute, contact Frisella Law Firm today.
