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CS Professional · Drafting, Pleadings and Appearances · Types of Documents

Orchid Pharma and Bharat Labs signed a written agreement with an entire-agreement clause. Bharat later claims that before signing, Orchid's manager orally promised a 10% rebate not recorded in the document, and seeks to prove it by oral evidence to add a term. Under the rule against oral evidence varying written documents, what is the position?

Such oral evidence is generally excluded. Once parties record their contract in writing, especially with an entire-agreement clause, oral statements cannot be used to add to or vary its terms. The manager's rank or the commercial nature of the deal does not change this rule.

  1. AOral evidence is always admissible to add terms
  2. BOral evidence to add a rebate term contradicting or adding to the complete written terms is generally excludedCorrect
  3. COral evidence is admissible only if the manager is a director
  4. DOral evidence is admissible because the agreement is commercial

Explanation

Where the parties have reduced their contract to writing, evidence of oral agreements is generally excluded for contradicting, varying, adding to or subtracting from its terms, and an entire-agreement clause reinforces this. Statutory provisos allow exceptions such as fraud or a separate oral agreement on a matter on which the document is silent, but none applies on these facts. The manager's rank or the commercial nature is irrelevant.

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