THE PAROL EVIDENCE RULE AND INTERPRETATION OF VAGUE CLAUSES
In a recent decision in the Supreme Court of Appeal an agreement between a golf estate and a developer, mandated the Developer to build a club house thereon “duly furnished in accordance with the upmarket quality and nature of the proposed development.”
The agreement further had a standard, non-variation clause, which provides that no amendments thereto are of any force or effect unless reduced to writing and signed by all parties.
In this particular matter the developer accordingly built a club house, however the Golf estate argued that the club house was not in accordance with the “upmarket quality and nature of the proposed development”.
The issue that this raises is that the clause in question was vague and that it did not give any indication or yardstick against which to measure what the reasonable person would perceive to fall within “the upmarket quality and nature of the proposed development.”
In the court a quo’s finding it took into consideration a newsletter sent out post-contractu, as to interpret what the Developer had intended – whilst this may in fact seem fair and reasonable – the problem is that the Court cannot admit post-contractual extrinsic evidence.
The Parol evidence rule clearly prohibits the admission of any extrinsic evidence that alters, contradicts, varies or adds to a written agreement.
It is thus advisable to consult with an attorney prior to the conclusion of any written agreement to which you feel uncertain about the implications thereof.
