Where a contract includes all that is necessary to establish the parties' rights and obligations, it is presumed that the parties have introduced into it every material item and term; and parol evidence cannot be admitted to add another term to the agreement.
A vendor and purchaser executed a written contract of sale for logs. The vendor brought an action to recover a sum of money from the purchaser. In his defense, the purchaser claimed that the vendor had breached a warranty of the quality of the logs. During trial, the trial court admitted oral testimony to prove the verbal warranty and ruled in the purchaser's favor despite the vendor's objection that such testimony was incompetent to prove a verbal warranty, because the contract of sale was in writing. The case was appealed to the Supreme Court of Minnesota.
Should parol evidence be allowed when there is a written contract?
The Court held that it was improper for the trial court to admit parol evidence of a warranty. Parol contemporaneous evidence was inadmissible to contradict or vary the terms of a valid written instrument. Because the parties deliberately put their engagements into writing in such terms as to create a legal obligation, without any uncertainty as to the object or extent of such engagement, it was conclusively presumed that the whole engagement of the parties, and the manner and extent of the undertaking, was reduced to writing. There was nothing on its face to indicate that the contract was a mere informal and incomplete memorandum. Furthermore, no new term, forming a mere incident to or part of the contract of sale, could be added by parol evidence.