Contracts
What is the 'parol evidence rule' and how does it apply to Pennsylvania real estate contracts?
AA rule allowing oral testimony to replace written contract terms during parole hearings
BA rule preventing the introduction of prior oral or written agreements to contradict or vary the terms of a fully integrated written contract✓ Correct
CPennsylvania's requirement that all real estate contracts be notarized
DA rule requiring all real estate contracts to be reviewed by a parole board before closing
Explanation
The parol evidence rule prevents parties from introducing evidence of prior oral or written agreements to contradict, vary, or add to the terms of a fully integrated (complete) written contract. In Pennsylvania real estate, once the Agreement of Sale is signed with a merger clause, prior discussions about repairs, inclusions, or other terms cannot be used to contradict the written contract.
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Key Terms to Know
Purchase Agreement
A legally binding contract between a buyer and seller that outlines the terms and conditions of a real estate sale.
ContingencyA condition in a purchase contract that must be satisfied before the sale can proceed to closing.
Short SaleA sale of real property where the sale proceeds are less than the outstanding mortgage balance, requiring lender approval.
Listing AgreementA contract between a property owner and a real estate broker that authorizes the broker to market and sell the property.
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