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Supreme Court of Pennsylvania - 281 Pa. 320
Tags: Contracts, Parol evidence rule
In the 1924 Gianni v. R. Russell & Co. case, the Supreme Court of Pennsylvania clarified the parole evidence rule in contract law. This rule focuses on when outside evidence can be used to explain or interpret contract terms.
Gianni, the plaintiff, leased a store from R. Russell & Co. (the defendant), including a clause that the defendant could not rent another store in the building for selling certain goods. After the defendant did lease another store for similar goods, Gianni sued for breach of contract.
The defendant claimed an oral agreement allowed the lease, but the trial court ruled in Gianni's favor. The parole evidence rule meant the oral agreement couldn't be considered as evidence. The defendant appealed, arguing that the oral agreement should be allowed to interpret the lease agreement.
The Supreme Court of Pennsylvania upheld the ruling, stating the parole evidence rule disallowed the oral agreement as evidence. The rule stops outside evidence from contradicting or altering a complete written agreement. In this case, the court determined the lease was fully integrated, and the oral agreement contradicted it.
This case is significant because it provided guidance on when outside evidence could be used in contract law. It emphasized the importance of a written agreement as the final expression of the parties' intentions, promoting certainty and predictability in contract law.
The plaintiff, a tenant, claims that an oral agreement was made with the defendant's agent, giving him the exclusive right to sell soft drinks in exchange for not selling tobacco and paying increased rent. The plaintiff sued for damages for breach of the alleged oral contract and was allowed to recover. The defendant has appealed the decision. The court believes that the alleged oral agreement is relevant to the provisions of the written lease. However, the parol evidence rule states that when parties put their agreement in writing, the writing is the only evidence of their agreement, and parol evidence cannot add or subtract from its terms unless fraud, accident, or mistake is alleged. Evidence of the alleged oral contract is inadmissible under the parol evidence rule if the written contract is the complete contract of the parties and covers the same subject matter. The intent of the parties is determined by whether the particular element of the alleged extrinsic negotiation is mentioned, covered, or dealt with in the writing.
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