First Principles of Business Law
The contents of a contract
5. Proving the existence of agreed terms

5.5. Application of the parol evidence rule when there are mistakes in contracts

 

 

 

Read the facts and the question and then choose the best answer.

A agrees to sell his car to B for $10,000. All the agreed terms of the agreement are put in writing and signed by A and B. The agreement appears complete on its face.  Then, later, A notices that the price in the written contract has been mistyped as $1,000.

Will A be permitted to lead evidence of what price was really agreed orally?

(a) Yes, because both A and B thought they had agreed to the higher price and what was written down was not what had been agreed.

(b) No. Even if A and B had agreed to the higher price, it is the written terms that bind them contractually and these cannot be changed.

 

 

 

 

 

 

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