Also known as: parol agreements · oral agreement · verbal agreement
Written by attorneys · grounded in primary & secondary sources — see below
2 senses
An oral agreement that discharges all unperformed duties under an existing contract.
An oral agreement that supplies consistent additional terms to a writing that is not completely integrated.
An oral agreement that discharges all unperformed duties under an existing contract.
Select any source to read its text and confirm it supports the definition.
An oral agreement that supplies consistent additional terms to a writing that is not completely integrated.
Select any source to read its text and confirm it supports the definition.
Each sense below has its own examples, sources, and questions.
Paige Porter and Prime Logistics signed a written contract for monthly deliveries of packaging materials over two years. Before any shipments began, the parties met at a trade show and shook hands on canceling the entire arrangement. When Prime Logistics later demanded performance, the court held the handshake constituted a parol agreement that discharged all remaining duties.
An oral agreement of rescission discharges all unperformed duties under an enforceable contract even if the original contract is subject to the statute of frauds. The statute may still apply if the rescission itself transfers an interest in property.
Supporting sources
Pedro Pacheco and Platinum Partners executed a signed purchase order for 500 widgets that listed only a maximum monthly quantity. During negotiations the parties had orally agreed that all units would ship in the first two weeks of each month to meet seasonal demand. When a dispute arose over late shipments, the court admitted the oral understanding to supplement the writing without contradiction.
Phuong Pham accepted a written job offer from Prosperity Investments that contained an integration clause. After starting work, her supervisor orally promised a bonus if certain revenue targets were met. When the company later denied the bonus, the court examined whether the parol agreement could vary the integrated writing.
Pilar Pena and Patriot Insurance entered a written employment contract silent on overtime. Supervisors orally assured Pena that extra hours would be compensated at a premium rate. After a dispute over unpaid overtime, the court considered whether the parol agreement could be used to interpret the compensation terms.
Pierre Poulin contracted in writing with Dairy Queen, Inc. for equipment purchases that specified payment upon delivery. The parties orally agreed that payment could be delayed thirty days if inventory moved slowly. When payment was withheld, the court evaluated whether the parol agreement supplied a consistent additional term.
Phoebe Park and Aluminum Company of America signed a long-term supply contract with a fixed price formula. During negotiations the parties orally agreed the price would rise with raw-material costs. When costs increased, the court assessed whether the parol agreement could modify the written pricing term.
No. When a writing is not completely integrated, evidence of consistent additional terms is admissible to explain or supplement the writing. The rule only excludes evidence that contradicts a term the parties intended to be final.
Supporting sources
An integration clause indicates the writing is completely integrated and therefore discharges prior agreements within its scope. A subsequent oral modification may still be enforceable if it satisfies the statute of frauds or an exception such as reliance or unanticipated circumstances.
Supporting sources
…We conclude that such agreements are enforceable. Plaintiff avers that in October of 1964 she and defendant "entered into an oral agreement" that while "the parties lived together they would combine their efforts and earnings and would share equally any and all property accumulated as a result of their efforts whether…