12 June 2006

Life Good Without Parol Evidence Rule In Israel

Suppose you have a signed written contract which is on its face unambiguious. You might want to introduce evidence about the negotiations that went into drafting it, for purposes of interpreting it. In almost every American jurisdiction, you can't, and even if you do by mistake, the court can't consider it.

The reason for this rule, which is popular with practicing lawyers, is that it, in theory, should make a contract lawsuit cheaper. Introduce the contract into evidence, offer evidence showing that the contract wasn't modified, introduce evidence of the breach of contract (often from business records), present a damages calculation, and voila, the case is done, with little or no testimony concerning the terms of the contract itself. An increased range of relevant testimony, in theory, means more depositions, longer trials, and more uncertainty.

Except, that in reality, it doesn't. Israel used to have a rule very similar to the parol evidence rule. Then, Apropim came along about a decade ago and ditched the rule. A decade later, the Israeli Supreme Court, under a special procedure to take a long term view of past precedents and see if it made the right call, unanimously agreed that this was a good thing, and has not produced the horrors the practicing bar predicted at the time.

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