Which statement about parol evidence and ambiguity is correct?

Which statement about parol evidence and ambiguity is correct?

• A. To explain an ambiguity in the contract
• B. To add new terms to the contract
• C. To contradict the written instrument
• D. To replace the written contract with an oral agreement

Answer: (A)

Ambiguity in a contract allows parol evidence to explain what the terms mean. When a term is unclear, extrinsic evidence about the parties’ understanding can be admitted to interpret it, rather than changing or defeating the written terms. That’s why explaining an ambiguity with parol evidence is the correct statement. Parol evidence isn’t used to add new terms, contradict the written instrument, or replace the written contract with an oral agreement, at least when the contract is fully integrated. Those actions would undermine the written agreement and are generally not allowed unless there’s a different, applicable exception (like evidence of a non-integrated agreement or issues like fraud).

Ambiguity in a contract allows parol evidence to explain what the terms mean. When a term is unclear, extrinsic evidence about the parties’ understanding can be admitted to interpret it, rather than changing or defeating the written terms. That’s why explaining an ambiguity with parol evidence is the correct statement.

Parol evidence isn’t used to add new terms, contradict the written instrument, or replace the written contract with an oral agreement, at least when the contract is fully integrated. Those actions would undermine the written agreement and are generally not allowed unless there’s a different, applicable exception (like evidence of a non-integrated agreement or issues like fraud).