California Landmark Cases on the Parol Evidence Rule
The parol evidence rule, which is codified in Code of Civil Procedure section 1856 and Civil Code section 1625, establishes that extrinsic evidence is not admissible to ascribe a meaning to an agreement to which it is not reasonably susceptible. (Wells Fargo Bank v. Marshall (1993) 20 Cal.App.4th 447, 453.)
"It provides that when parties enter an integrated written agreement, extrinsic evidence may not be relied upon to alter or add to the terms of the writing. (Casa Herrera, Inc. v. Beydoun (2004) 32 Cal.4th 336, 343 (Casa Herrera ).)
'An integrated agreement is a writing or writings constituting a final expression of one or more terms of an agreement.' (Rest.2d Contracts, 209, subd. (1); see Alling v. Universal Manufacturing Corp. (1992) 5 Cal.App.4th 1412, 1433.)" (Riverisland Cold Storage, Inc. v. Fresno-Madera Production Credit Assn. (2013) 55 Cal.4th 1169, 1174 (Riverisland), fn. omitted.) There is no dispute in this case that the Side Agreement was integrated.
"Although the parol evidence rule results in the exclusion of evidence, it is not a rule of evidence but one of substantive law. (Casa Herrera, supra, 32 Cal.4th at p. 343.)
It is founded on the principle that when the parties put all the terms of their agreement in writing, the writing itself becomes the agreement. The written terms supersede statements made during the negotiations. Extrinsic evidence of the agreement's terms is thus irrelevant, and cannot be relied upon. (Casa Herrera, at p. 344.)
'The parol evidence rule, unlike the statute of frauds, does not merely serve an evidentiary purpose; it determines the enforceable and incontrovertible terms of an integrated written agreement.' (Id. at p. 345; cf. Sterling v. Taylor (2007) 40 Cal.4th 757, 766 explaining evidentiary function of statute of frauds.) The purpose of the rule is to ensure that the parties' final understanding, deliberately expressed in writing, is not subject to change. (Casa Herrera, at p. 345.)" (Riverisland, supra, 55 Cal.4th at p. 1174.)