2017 ORS 41.740¹
Parol evidence rule

When the terms of an agreement have been reduced to writing by the parties, it is to be considered as containing all those terms, and therefore there can be, between the parties and their representatives or successors in interest, no evidence of the terms of the agreement, other than the contents of the writing, except where a mistake or imperfection of the writing is put in issue by the pleadings or where the validity of the agreement is the fact in dispute. However this section does not exclude other evidence of the circumstances under which the agreement was made, or to which it relates, as defined in ORS 42.220 (Consideration of circumstances), or to explain an ambiguity, intrinsic or extrinsic, or to establish illegality or fraud. The term “agreement” includes deeds and wills as well as contracts between parties.

Notes of Decisions

In General

Notwithstanding existence of the filled-in form contract defendant was entitled to introduce evidence that the contract was not as agreed and that there was “no contract.” Pendleton Grain Growers v. Pedro, 271 Or 24, 530 P2d 85 (1975)

Reliance on the parol evidence rule cannot be raised for the first time on ap­peal. Allen v. Allen, 275 Or 471, 551 P2d 459 (1976)

Even if the parol evidence rule would permit proof of an alleged collateral oral agree­ment, there was no evidence it was breached. Hamilton v. Auto Driveaway Co., 278 Or 529, 564 P2d 1052 (1977)

Parol evidence rule does not apply unless parties intended writing to memorialize terms of agree­ment. Livran v. Fowler Tire Service, Inc., 282 Or 379, 578 P2d 1244 (1978)

Provisions of contract for sale of plywood and veneer business concerning indemnifica­tion for product liability claims were clear and unambiguous, precluding admission of parol evidence. Southwest Forest Industries v. Vanply, 43 Or App 347, 602 P2d 1113 (1979)

Vendor’s state­ments could not be excluded under parol evidence rule when vendees were also asserting right to rely on events or agree­ments outside scope of written land sale contract. Marshall v. Wattles, 67 Or App 442, 678 P2d 762 (1984)

Oral agree­ment to term of contract made prior to conflicting term in written contract is not waiver of right to rely on written terms, but is inadmissible parol evidence. Mid-River Transporta­tion Services, Inc. v. VanPelt, 121 Or App 532, 854 P2d 506 (1993), Sup Ct review denied

Writing Is to Be Considered As Containing All the Terms of the Agree­ment

Oral agree­ment is not superseded or invalidated by sub­se­quent or contemporaneous integra­tion, nor written agree­ment by sub­se­quent integra­tion relating to same subject matter, if agree­ment is not inconsistent with the integrated contract, and (1) is made for separate considera­tion, or (2) is such an agree­ment as might naturally be made as separate agree­ment by parties situated as were the parties to the written contract. DeVore v. Weyerhaeuser Co., 265 Or 388, 508 P2d 220 (1973), cert. denied, 414 US 1108, 38 L Ed 2d 736, 94 S Ct 836

Oral admissions of plaintiff that agree­ment included matters not contained in the writing may be proved to show that it was not assented to as a complete integra­tion, however complete it may look on its face. DeVore v. Weyerhaeuser Co., 265 Or 388, 508 P2d 220 (1973), cert. denied, 414 US 1108, 38 L Ed 2d 736, 94 S Ct 836

The parol evidence rule will not exclude evidence of an oral agree­ment which is not inconsistent with the written contract, and which is such as might naturally be made separately under the circumstances. Rodasky v. Loucks, 267 Or 521, 517 P2d 665 (1973)

Evidence of oral “stipula­tions” that were reduced to writing and attached to the base before plaintiff signed the lease was properly admitted. Wall v. S.E.C. Co., Inc., 270 Or 553, 528 P2d 1054 (1974)

Circumstances indicating whether docu­ment is intended as complete include business experience of parties, use of legal counsel, relative bargaining power of parties and apparent completeness of docu­ment. Hatley v. Stafford, 284 Or 523, 588 P2d 603 (1978)

Court determina­tion on how court finding of fact re­gard­ing docu­ment and party intent affects admissibility of evidence is reviewable as matter of law. Wescold, Inc. v. Logan Interna­tional, Ltd., 120 Or App 512, 852 P2d 960 (1993), Sup Ct review denied

Particular Instru­ments or Agree­ments

Parol evidence is not admissible to vary or contradict the terms of a con­sent decree where the con­sent decree is unambiguous on its face. Renken v. Harvey Alum. Inc., 347 F Supp 55 (1971)

Evidence of oral “stipula­tions” that were reduced to writing and attached to the base before plaintiff signed the lease was properly admitted. Wall v. S.E.C. Co., Inc., 270 Or 553, 528 P2d 1054 (1974)

Parol evidence is admissible to show a condi­tion precedent to the enforceability of a bank check. Engelcke v. Stoehsler, 273 Or 937, 544 P2d 582 (1975)

Where prop­erty settle­ment agree­ment provided only that each party released and discharged the other from all claims and prop­erty demands and made no men­tion of life insurance policy, this sec­tion did not prevent trial court from receiving parol evidence showing decedent’s intent to retain former spouse as beneficiary of insurance policy. Prudential Insurance Co. v. Weatherford, 49 Or App 835, 621 P2d 83 (1980)

Where definitive fourteen-page contract was signed by parties after four months of negotia­tion following execu­tion of earnest money agree­ment and where contract expressly provided that it constituted entire agree­ment of parties, parol evidence rule prohibited considera­tion of terms of earnest money agree­ment or evidence of negotia­tion in interpreta­tion of contract. Oakridge Cablevision, Inc. v. First Interstate Bank, 65 Or App 640, 673 P2d 532 (1983)

Showing Intent or Understanding

Evidence of contracting party’s unilateral inten­tion, rather than the mutual inten­tion of the parties, was properly excluded. Fry v. D. H. Overmyer Co., 269 Or 281, 525 P2d 140 (1974)

Applica­tion of indemnity clause to plaintiff’s signing of lease for corpora­tion shortly before plaintiff was formally made of­fi­cer, director and shareholder created extrinsic ambiguity as to scope of indemnity clause and allowed considera­tion of parol evidence re­gard­ing intent of parties. Rodway v. Arrow Light Truck Parts, 96 Or App 232, 772 P2d 1349 (1989)

Trial court did not err when it excluded parol evidence re­gard­ing parties’ understanding of terms “leased” and “occupied” in commercial lease because terms were neither patently nor latently ambiguous as used in agree­ment. Hayden Corpora­tion v. Gayton, 98 Or App 703, 780 P2d 787 (1989)

Collateral Oral Agree­ments

The parol evidence rule does not affect a parol collateral contract independent of a written agree­ment. Blehm v. Ringering, 260 Or 46, 488 P2d 798 (1971)

An oral agree­ment placing a condi­tion precedent on the effectiveness of a written contract is operative unless such condi­tion is inconsistent with the language in the writing. Osburn v. Lucas, 263 Or 480, 502 P2d 1382 (1972)

Although literal reading of this sec­tion would exclude any parol evidence of agree­ment reduced to writing, court has treated statute as codifica­tion of common law parol evidence rule and recognized the various common law excep­tions to the rule. Hatley v. Stafford, 284 Or 523, 588 P2d 603 (1978)

Evidence of oral agree­ment accompanying written real prop­erty transac­tion was properly admitted under this sec­tion since it was not inconsistent with written terms and was such that it was natural, considering all the circumstances, that parties enter into separate agree­ment. Greenwade v. Citizens Bank of Oregon, 50 Or App 395, 624 P2d 610 (1981)

This sec­tion bars admission of evidence of alleged oral agree­ment made before written agree­ment only if parties intended writing to be final and complete expression of their agree­ment. Siegner v. Interstate Produc­tion Credit Assn., 109 Or App 417, 820 P2d 20 (1991)

Conversa­tion occurring after execu­tion of written agree­ment was not admissible as evidence of alleged oral agree­ment reached prior to execu­tion of written agree­ment. Abercrombie v. Hayden Corp., 320 Or 279, 883 P2d 845 (1994)

Evidence of Circumstances

Regardless of a written agree­ment, peti­tioner was entitled to present evidence in support of his claim based on a theory of implied contract or quantum meruit. State ex rel Hwy. Comm. v. Chaparral Recrea­tion Assn., 17 Or App 416, 522 P2d 236 (1974)

In a pro­ceed­ings to es­tab­lish primary liability for the pay­ment of a deficiency in a foreclosed mortgage, parol evidence of the circumstances under which the earnest money agree­ment was executed was admissible to resolve the ambiguities in such agree­ment as to the parties’ intent. U.S. v. Pollard, 524 F2d 808 (1975)

Court may consider circumstances underlying forma­tion of contract to determine whether particular contractual pro­vi­sion is ambiguous. Batzer Construc­tion, Inc. v. Boyer, 204 Or App 309, 129 P3d 773 (2006), Sup Ct review denied

Evidence to Establish Illegality or Fraud

Proof of fraud by evidence of prior or contemporaneous promises and representa­tions is not prohibited by this sec­tion. Howell v. Oregonian Publishing Co., 82 Or App 241, 728 P2d 106 (1986), as modified by 85 Or App 84, 735 P2d 659 (1987), Sup Ct review denied

Evidence alleging contract to be sham is challenge to validity of contract, not at­tempt to vary terms of contract. Roberts v. Maze, 161 Or App 441, 985 P2d 211 (1999), Sup Ct review denied

Evidence to Explain Ambiguity

In a pro­ceed­ings to es­tab­lish primary liability for the pay­ment of a deficiency in a foreclosed mortgage, parol evidence of the circumstances under which the earnest money agree­ment was executed was admissible to resolve the ambiguities in such agree­ment as to the parties’ intent. U.S. v. Pollard, 524 F2d 808 (1975)

Evidence of signator’s intent was admissible where credit agree­ment was ambiguous on its face. Bonded Credit Company v. Hendrix, 282 Or 35, 576 P2d 795 (1978)

Where it was unclear whether parties intended that monthly pay­ments be spousal support or prop­erty division, in light of surrounding circumstances trial judge was entitled to consider parol evidence of what parties intended to accomplish by monthly pay­ments. Truax and Truax, 62 Or App 130, 659 P2d 983 (1983)

Parties to Contract

An Agent Who Entered Into A Land Sale Contract for A Disclosed Principal Was A Party to the Contract and Entitled to Enforce the Contract Individually Where

1) the contract named him as purchaser and individual without reference to the principal or fact that he was an agent; 2) the seller did not care who the principal was; and 3) the agent signed a demand note and an applica­tion for a condi­tional use change in his individual name. Ritchie v. Mundon, 268 Or 283, 520 P2d 445 (1974)

Law Review Cita­tions

54 OLR 243 (1975); 28 WLR 223 (1992); 84 OLR 369 (2005)

1 Legislative Counsel Committee, CHAPTER 41—Evidence Generally, https://­www.­oregonlegislature.­gov/­bills_laws/­ors/­ors041.­html (2017) (last ac­cessed Mar. 30, 2018).
 
2 Legislative Counsel Committee, Annotations to the Oregon Revised Stat­utes, Cumulative Supplement - 2017, Chapter 41, https://­www.­oregonlegislature.­gov/­bills_laws/­ors/­ano041.­html (2017) (last ac­cessed Mar. 30, 2018).
 
3 OregonLaws.org assembles these lists by analyzing references between Sections. Each listed item refers back to the current Section in its own text. The result reveals relationships in the code that may not have otherwise been apparent.