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In which of the following situations is parol evidence contradictory to the final terms admissible?Multiple choice question.If the oral agreement was made at the time of the creation of the contractIf the oral agreement was made before the creation of the contractIf the oral agreement was made subsequent to the creation of the contractIf the final agreement is an unconscionable contract

Question

In which of the following situations is parol evidence contradictory to the final terms admissible?Multiple choice question.If the oral agreement was made at the time of the creation of the contractIf the oral agreement was made before the creation of the contractIf the oral agreement was made subsequent to the creation of the contractIf the final agreement is an unconscionable contract

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Solution

The parol evidence rule generally prohibits the introduction of evidence of prior or contemporaneous negotiations and agreements that contradict, modify, or vary the contractual terms of a written contract when the written contract is intended to be a complete and final expression of the parties’ agreement. However, there are exceptions to this rule.

  1. If the oral agreement was made at the time of the creation of the contract: Generally, parol evidence is not admissible to contradict the terms of the contract. However, if the oral agreement is a collateral agreement, it may be admissible. A collateral agreement is a separate agreement that does not contradict the written contract and could stand on its own.

  2. If the oral agreement was made before the creation of the contract: Parol evidence is generally not admissible to contradict the terms of the contract. The rationale is that any oral agreement made before the contract was likely incorporated into the final written contract.

  3. If the oral agreement was made subsequent to the creation of the contract: Parol evidence may be admissible in this case. If the parties to a contract later agree to change its terms, that subsequent agreement will be enforceable even though it contradicts the written contract.

  4. If the final agreement is an unconscionable contract: Parol evidence may be admissible to show that the contract is unconscionable. Unconscionability is a doctrine in contract law that describes terms that are so extremely unjust, or overwhelmingly one-sided in favor of the party who has the superior bargaining power, that they are contrary to good conscience.

So, the correct answer is: "If the oral agreement was made subsequent to the creation of the contract" and "If the final agreement is an unconscionable contract".

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What are some of the exceptions to the parol evidence rule? (Check all that apply.)Multiple select question.Contracts that are no longer profitable to both partiesContracts that deal with international issuesContracts that have been subsequently modifiedContracts with ambiguous terms

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