Parol Evidence Rule

The parol evidence rule highlights the importance of getting your language—provisions that benefit your side of the negotiation—in the final write-up of the contract. Using this rule, judges can exclude evidence that could show the oral “side-deal” not included in the formal written contract. The common inclusion in contracts of an integration clause—that the written document is the complete agreement—highlights the traditional exclusion of oral evidence that might contradict the terms in the writing.

Third-Party Rights

When a contractual relationship between two parties is extended to a third party, a host of complicated problems can arise. Again, a carefully crafted, comprehensive written agreement can anticipate and avoid many of these potential problems.

Contractual Obligations and Remedies for Breach

The introduction to contract obligations and remedies here gives a sense of the range of remedies for breaching a contractual obligation. The most common remedy, compensatory damages, puts the wronged party in the same position he would have been in if the breaching party had performed as promised. There is seldom “big money” for successful litigants in breach of contract lawsuits. The courts and the legislature are sending the disputants a simple message—settle. The successful litigant “made whole” by compensatory damages must, under the “American rule,” win or lose, pay their own attorney fees. The cost of expensive lawyers in commercial litigation should be a further impetus to avoid trial and negotiate a resolution of the contract dispute.

E-Contracts

E-Contracts reflect a clash between the remoteness and speed of commerce on the internet with a body of rules created for deal-making at a time when contracts were formed in a more intimate, personal setting and at more deliberate pace. Many of the old rules don’t work very well in cyberspace. So, legislatures have stepped in with a number of statutes. Time will tell if the new legislation helps.