A more thorough explanation:

Definition: Extrinsic evidence is information that relates to a contract but is not included in the written agreement. This evidence comes from other sources, such as statements made by the parties, circumstances surrounding the agreement, and general trade practices. It helps to provide context to the transaction between the parties.

Extrinsic evidence is used to interpret a contract when there is ambiguity or a gap in the written agreement. However, if a contract is unambiguous, no extrinsic evidence is needed. The parol evidence rule prohibits the use of extrinsic evidence that contradicts or varies a term in a writing that the parties intended to be completely integrated.

For example, if two parties sign a contract to sell a car for $10,000, but one party claims that they agreed to sell the car for $9,000, the parol evidence rule would prevent the use of any extrinsic evidence that supports the $9,000 price.

However, if there is ambiguity in the contract, extrinsic evidence can be used to interpret the agreement. For example, if a contract states that a seller will deliver "widgets" to a buyer, but does not specify the quantity or type of widgets, extrinsic evidence such as prior conversations between the parties or industry standards can be used to determine the intended meaning of "widgets."

Overall, extrinsic evidence helps to provide context and clarity to a contract when needed.