What does the parol evidence rule establish regarding contracts?

• A. Parties can modify written contracts verbally
• B. Parties cannot alter their contract orally after it has been written
• C. Verbal agreements take precedence over written contracts
• D. Only courts can modify written contracts

Answer: (B)

The parol evidence rule establishes that once parties have put their agreement into a written contract, any prior or contemporaneous oral statements or agreements that would contradict the written terms are generally inadmissible in court to alter the contract's meaning. This means that the written contract is considered the complete and final representation of the parties' agreement, and verbal modifications or understandings are not recognized in the event of a dispute.

This rule serves to uphold the integrity of written contracts by ensuring that the written document is treated as the definitive agreement between the parties. It protects against inconsistencies and misunderstandings that may arise from informal verbal communications. In essence, it reinforces the notion that once an agreement is documented, modifications should also be documented in writing to avoid any ambiguity in the future.