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PAROL EVIDENCE RULE (COLLATERAL CONTRACT (How to prove Collateral Contract…
PAROL EVIDENCE RULE
CONCEPTS
The rule operates to restrict the parties to a written contract from providing evidence which contradicts the term of the contract
General rule: extrinsic evidence may not be given to contradict, vary, add to, or subtract the said agreement
Evidence cannot be admitted to add to, vary or contradict the written instrument.
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COLLATERAL CONTRACT
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Raja Azlan Shah CJ
Tan Swee Hoe Co Ltd v Ali Hussain Bros [1980] 2 MLJ 16 :
"... This device of collateral contract does not offend the extrinsic evidence rule because the oral promise is not imported into the main agreement. Instead it constitutes a seperate contract whic exists side by side with the main agreement."
The Objectives
To enforce a promise made prior to the making of the main contract, and but for which the main contract would not have been made
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Merely confers certain other right which are not incorporated in the main contract; such rights must relate to the rights and obligation of the parties
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FACTORS IN CONSIDERATION
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3) Status of the parties
The more educated the person is, the more likely a colletera contract will be given legal effect
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However
Extrinsic evidence may be introduced to show that the written agreement did not represent the whole bargain between the parties
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s92: "..no evidence of any oral agreement shall be admitted as between the parties to any such instruments where the said oral agreement contradicts, varies or subtracts from the term of the contract."
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