Parol Evidence Rule (PER)

Definition
Refers to extraneous evidence such as an oral agreement

or even a written agreement that is not included in the

relevant written document such as contract agreement.
It preserves the honor of written documents or
agreements by prohibiting the parties from attempting to
alter the meaning of the written document through the use
of prior and simultaneous oral or written declarations that
are not referred to in the document
In order for the rule to be successful, the contract in
question must be a fully integrated (included) in writing;
it must, in the judgment of the court, be the final
agreement between the parties and not a mere draft.

What Is The Rationale Behind The Parol Evidence

Rule?

reflective of the parties true intentions

Why Is The Parol Evidence Rule Necessary?

to encourage parties to draft better contracts;
to reducing litigation and arguments between

parties over the meaning of a written document; and

to assist the court in determining the true intentions
of the parties at the time of the formation of the
contract.

Common law position:

The parol evidence rule endorses a principle of the

common law of contracts that a written contract

embodies the complete agreement between the parties
involved that is the document is the sole repository
(store) of the terms of the contract.
The rule therefore generally forbids the introduction of
any extrinsic evidence
See: Jacobs v. Batavia & General Plantations Trust
Ltd [1924] 1 Ch 287

Malaysian position:
Sections 91 to 99 of the Act deal with the exclusion of

oral by documentary evidence.

Section 91 provides
When the terms of a contract or of a grant or of any other
disposition of property have been reduced by or by
consent of the parties to the form of a document, and in
all cases in which any matter is required by law to be
reduced to the form of a document, no evidence shall be
given in proof of the terms of the contract, grant or other
disposition of property or of the matter except the
document itself, or secondary evidence of its contents in
cases in which secondary evidence is admissible under
the provisions hereinbefore contained.

This section requires the production of the document

itself for proof of its contents.

The first limb of section 91 provides that when terms

of a contract, grant or disposition of property have

been reduced by or by consent of the parties to the
form of a document then no evidence shall be given in
proof of the terms of the contract, grant or disposition
except the document itself (the primary evidence) or
secondary evidence.

However, section 91 only excludes oral evidence on

the terms of the written contract. Oral evidence is still

admissible to prove the existence of a contract.

Section 92 of the Act will only apply after the document

has been produced for the purpose of excluding evidence of

any oral agreement or statement to contradict, vary, add to
or subtract from its terms.
Section 92 provides that

When the terms of any such contract, grant or other

disposition of property, or any matter required by law to be

reduced to the form of a document, have been proved
according to section 91, no evidence of any oral agreement or
statement shall be admitted as between the parties to any such
instrument or their representatives in interest for the purpose
of contradicting, varying, adding to, or subtracting from its
terms.

This section provides that as a general rule evidence of any

oral agreement is not admissible as between the parties to

contradict, vary, add to or subtract from the terms of the
written agreement proved under section 91 of the Act
unless the evidence sought to be introduced falls within one
of the provisos of the section.

Sections 91 ad 92 are based on the concept of the best

evidence rule. The parol evidence rule thus based on

the best evidence rule i.e. the best evidence that the
party must produce. Both sections supplement
(connected) to each other.

Both must also be read together with section 144

(evidence as matter to writing) of the Evidence Act

1950. This section deals with the exclusion of oral
evidence when the matter on which a witness is
testifying or is about to testify the contents of a
document.

 See : Augustine Paul JC in Datuk Tan Leng Teck v Sarjana Sdn

Bhd [1997] 4 MLJ 329

See: PB Gajendragadkar J in Bai Hira Devi v Official Assignee

AIR 1958 SC 448 stated that
See also: Inspector General of Police & Anor v. Alan Noor bin

Kamat [1988] 1 MLJ 260.

it is clear that under section 91 of the Evidence Act no evidence
can be given in proof of any matter which is required by law to be
reduced to a form of a document and section 92 prohibits the giving
of oral evidence to contradict or vary or explain the terms of such
document.
Section 91 & 92 applies to criminal trials
See Ah Mee v PP [1967] 1 MLJ 220 & PP v Tan Siew Hui
[2008] 8 CLJ 142.

Section 93 98 of Evidence Act 1950.

Read together with section 92 proviso (f): The rule of

ambiguity of a document.
In Faber Merlin (M) Sdn Bhd & Ors v Lye Thai Seng
[1985] 2 MLJ 380, the court laid down the principle that
when there is no ambiguity in a written agreement then the
general rule against extrinsic evidence applies.
Accordingly, there are two types of ambiguities in which a
document suffer from namely:
Apparent/clear/patent ambiguity: Ambiguity is clear on
the surface of the record/document. If we read the whole
document, we cannot understand on the face of it. The court
will not allow extrinsic evidence to cure patent ambiguity by
producing extrinsic evidence.
Latent/hidden ambiguity: On the face of it, it is all right
but cannot exactly be precise. For example if there are 2
places of the same name we can introduce extrinsic to cure
the defect.

The exceptions

Section 92 provides
When the terms of any such contract, grant or other
disposition of property, or any matter required by law to be
reduced to the form of a document, have been proved
according to section 91, no evidence of any oral agreement or
statement shall be admitted as between the parties to any such
instrument or their representatives in interest for the purpose
of contradicting, varying, adding to, or subtracting from its
terms.
This section provides that as a general rule evidence of any

oral agreement is not admissible as between the parties to

contradict the terms of the written agreement proved under
section 91 of the Act unless the evidence sought to be
introduced falls within one of the provisos of the section.
This section applies only after the document has been
produced to prove the terms in accordance with section 91
of the Act.
A party is not precluded from adducing oral evidence to
contradict a recital of fact in the contract.

(See Ganam d/o Rajamany v Somoo s/o Sinnah [1984] 2

MLJ 290)

 If the document does not constitute a contract between the

parties and it is also not a document required by law to be

reduced to a form of a document, oral evidence is not
excluded

Phiong Khon v Chon Chai Fah [1970] 2 MLJ 114

If the intention of the parties is to reduce some portion of

their agreement into writing and leave the rest as oral

agreement, they may in such a case give extrinsic evidence
as to the portion not put in writing.

Damn Jadhas v Paras Nath Singh [1965] 2 MLJ 38.

In Tan Chong Motor Co (Sdn) Bhd v Alan McKnight

[1983] 1 MLJ 220, where it was held that

some terms are given orally and some in writing, oral

evidence could be given to prove the terms agreed to orally.

 The scope of the words any matter required by law to be reduced to the form

of a document in this section show that the section applies to bilateral and
dispositive documents. Section 91 is much wider than section 92 whereby it
apply to both unilateral and bilateral contract and in both dispositive and non
dispositive documents.
There are also a vital difference between section 91 and 92 as a result of the
use of the word as between the parties to any such instrument in section 92.
This part of the section shows that section 92 applies only to the parties to an
instrument and not to strangers. (Read with section 99 (look at the illustration
given) where a persons other than parties may give extrinsic evidence to vary
the document if it effected his interests).
Ibrahim J in Director General of Inland Revenue v Ee Sim Sai [1977] 2
MLJ 32 stated
Section 92 Applies Only to Parties to Instrument and Not to

Strangers. The words 'as between the parties to any such

instrument' are very important, as they and the reference to
'separate oral agreement' in proviso (2) restrict the application of
the rule only to the parties to the document or their privies (have
any interest). It does not apply to strangers who cannot be affected
by the terms of a document to which they were not parties and
which may contain untrue or collusive statements to serve some
fraudulent purpose or things prejudicial to their interests; whereas
section 91 applies to both strangers and parties. So, persons other
than the parties to the instrument or their representatives in
interest, i.e., third parties, are not precluded from giving extrinsic
evidence to contradict, vary, add to or subtract from the terms of
the document (section 99).

 The provisos to the section operate as an exception to the general rule.

Salleh Abas FJ in Tan Chong Motor Co (Sdn) Bhd v Alan

McKnight [1983] 1 MLJ 220 stated

There is this rule of evidence contained in section 92 of the Evidence Act to

the effect that no oral evidence will be admissible to contradict, vary, add or
subtract the terms of a written agreement unless the oral evidence comes
within one of the exceptions or illustrations contained in the section.

In Tindok Besar estate Sdn Bhd v Tinjar Co [1979] 2 MLJ 229

states that

Section 92 specifically excludes evidence to contradict, vary, add to or

subtract from any of the terms of a contract in writing, except in any of the
situations spelled out in the provisos thereto. These provisos are based on the
common law

(See United Malayan Banking Corp Bhd v Tan Lian Keng [1990]

1 MLJ 281)
The burden is on the party trying to adduce oral evidence.
Abu Mansor J in B-Trak Sdn Bhd v Bingkul Timber Agencies Sdn
Bhd [1989] 1 MLJ 124 states that

I am not unmindful of s 92 of the Evidence Act 1950 wherein it will be for

the defendants to argue at the trial whether it will be open for them to
contradict or vary the written terms.
(See also Ponniah v Chinniah [1961] MLJ 66; Perwira Habib Bank (M) Bhd v
Penerbitan ASA Sdn Bhd [1998] 5 MLJ 297).

1st exception: The vitiating factors:

The word vitiating or vitiate means ineffective or invalidate.
Section 92 proviso (a) provides that
any fact may be proved which would invalidate any document or which
would entitle any person to any decree or order relating thereto, such as
fraud, intimidation, illegality, want of due execution, want of capacity in
any contracting party, the fact that it is wrongly dated, want or failure of
consideration, or mistake in fact or law.
In Tan Siew Hee & Ors v Hii Sii Ung [1965] 1 MLJ 385 the plaintiff
claimed the sum of $3,356.00 on a promissory note signed by the
defendant which alleged a loan to the defendant by the plaintiffs. Oral
evidence of failure of consideration in a contract is admissible under
proviso (a) of section 92.

In NS Narainan Pillay v The Netherlandsche Handel Maatschappij

[1934] MLJ 227, Edmonds J in his supporting judgement stated that

If one assumes that the document should be regarded prima facie as a
contract, still proviso I would apply; according to which "any fact may be
proved which would invalidate any document or which would entitle any
person to any decree or order relating thereto; such as fraud,
intimidation, illegality, want of due execution, want of capacity in any
contracting party or failure of consideration or mistake in fact or law.
(See also Guthrie Waugh Bhd v Malaipan Muthucumaru [1972] 1
MLJ 35

 2nd exception: Collateral warranty:

Section 92 proviso (b) provides

the existence of any separate oral agreement, as to any matter on

which a document is silent and which is not inconsistent with its

terms, may be proved, and in considering whether or not this
proviso applies, the court shall have regard to the degree of
formality of the document.
This proviso allows other evidence to be admitted when it is alleged
that the written agreement is not the entire agreement. Therefore the
parties can prove that they entered into a distinct oral agreement on
some collateral (something additional or confirming, giving guarantee,
assurance, or security) matter.
In Tan Swee Hoe Co Ltd v Ali Hussain Bros [1980] 1 MLJ 89,

[1980] 2 MLJ 16, where the plaintiffs, the landlords of the premises,
claimed vacant possession of the premises and alleged that the
defendants, the tenants, were in arrears (debt) of rent. Notice to quit
had been given. The defendants alleged that they had paid the sum of
$ 14,000 to the landlords and claimed that they were entitled to
occupy the premises for as long as they wished on payment of rent
regularly. They also alleged that the plaintiffs had refused to accept
the arrears of rent. The learned trial judge found as a fact that the
defendants had paid the sum of $ 14,000 to the plaintiffs.

 Tan Chong & Sons Motor Co (Sdn) Bhd v Alan McKnight [1983] 1

MLJ 220, where in this case the respondent was a squadron leader in the
Royal Australian Air Force. He wanted to buy a car and get the benefit of
exemption from duty in Malaysia and Australia. He would have obtained
the exemption if the motor car was taken out of Malaysia and if it
complied with the Australian Design Regulations.
The learned trial judge found that there had been a warranty and this was
breached by the appellants. There was clear evidence that had it not been
for the promise of the salesman to deliver him a car complying with the
Australian Design Regulations, the respondent would not have signed the
Buyer's Order.

 In Kluang Wood Products Sdn Bhd & Anor v Hong Leong

Finance Bhd & Anor [1999] 1 MLJ 193, the Federal Court said that
in considering whether this proviso applies, regard is to be had to the
nature of the written agreement and its surrounding circumstances.
Depends on the background, nature or history of the agreements, the
more formal the agreement the less ready the court will allow a
collateral agreement to vary or contradict the written instrument.

In Ng Lay Choo Marion v Lok Lai Oi [1995] 3 SLR 221, the court

disallowed some oral term to be adduced in evidence (at page 227).

The agreement has indeed a high degree of formality and clearly
indicates that the parties intended the agreement to contain a full
description of their respective rights and obligations. The agreement
was drafted by a solicitor, on instructions from the respondent and all
the parties were fully aware of the alleged subject matter of the oral
terms and if these had been agreed at that time they would have been
incorporated in the agreement.

 3rd exceptions: Condition precedent:

Section 92 proviso (c) provides
the existence of any separate oral agreement
constituting a condition precedent to the attaching of any
obligation under any such contract, grant or disposition
of property, may be proved.
This proviso stated that if the contract is incomplete,

evidence of a prior agreement can help fill in what is

missing.

Condition precedent refers to an event or state of affairs

that is required before something else will occur.

In contract law a condition precedent is an event which

must occur, before performance under a contract

becomes due--i.e., before any contractual duty arises.

 In Ganesan v Baskeran [1986] 2 MLJ 26, where in this

case the appellants had agreed to buy land belonging to the

respondent and had paid a deposit of $ 20,000/-. There was
a restriction in the document of title that the land could not
be transferred without the consent of the Ruler in Council.
No such consent was obtained but the respondent applied
for the rescission of the contract and the forfeiture of the
deposit on the ground that the appellants had failed to
complete the transaction and that time was of the essence
of the contract.
It was held (Appeal allowed): (1) the central question that
arose for determination in this case is whether the
respondent did orally promise that he would obtain the
consent of the Ruler in Council necessary for the transfer.
There was therefore an issue to be tried; (2) evidence
relating to the separate oral agreement is admissible under
proviso (c) of section 92 of the Evidence Act and the
appellants should have been permitted to adduce evidence
to prove the existence of such a promise.
See also Pym v Cambell 6 E & B 370.

 4th exception: Condition subsequent:

Section 92 proviso (d) provides that
the existence of any distinct subsequent oral agreement, to
rescind or modify any such contract, grant or disposition of
property, may be proved except in cases in which the contract,
grant or disposition of property is by law required to be in writing,
or has been registered according to the law in force for the time
being as to the registration of documents.
This proviso provides proof of distinct subsequent oral

agreement to rescind or modify any contract except where it is

required by law to be in writing or has been registered. In other
words, it provides for the evidence of a later change in a written
contract.
Wong Juat Eng v Then Thaw Eu [1965] 2 MLJ 213, the
respondents predecessor let (rent) certain premises for a term
of 5 years to the appellant and her co-tenants under
memorandum of sublease which contained a covenant that the
subleasees were not to assign or sublet the demised premises or
any part thereof without the consent of the subleassor. The
appellant had sublet rooms on the premises but she alleged that
she had obtained verbal permission from the owner. The
respondent gave a months notice of termination of the sublease
and brought an action for possession of the premises. The court
held that parol evidence is admissible as evidence of waiver.

 Voo Min En v Leong Chung Fatt [1982] 2 MLJ 241, where

in this case the respondent was the lessee of premises in Kota

Kinabalu. The lease was in writing and registered in
accordance with section 104 of the Sabah Land Ordinance. It
provided for the possibility of renewal by written request. The
lease was for a period of 16 years commencing on January 16,
1965. As the lease in this case was required to be in writing by
virtue of section 104 of the Sabah Land Ordinance and has
been registered in accordance with the Ordinance, there is no
way in which the respondent's alleged agreement could be
proved under proviso (d) to section 92 of the Evidence Act.

In Teo Siew Peng v Guok Sing Ong [1983] 1 MLJ 132, the

court has laid down the principle that where the terms of an
instrument are required by law to be reduced into writing then
no evidence of any oral agreement can be admitted in
evidence.

 5th exception: Customs:

Section 92 proviso (e) provides that
any usage or custom by which incidents not expressly mentioned in

any contract are usually annexed to contracts of that description may

be proved if the annexing of any such incident would not be
repugnant to or inconsistent with the express terms of the contract.

This proviso provides that oral evidence is admissible to establish

a trade usage to be annexed to the written contract but such usage

must be consistent with the terms and intention or meaning of the
written contract.
Cheng Keng Hong v Government of Federation of Malaya
[1966] 2 MLJ 33 It was held that there was no custom as alleged
that if any work was done according to the drawing which was
not set out in the specification, extra payment would be made, as
such usage would be inconsistent with the contract, which
consists of the tender, acceptance and other relevant documents.
Smith v Welson [1632] 3 B & Ad 726 stated that
where extrinsic evidence was given to show that a written
contract stating 1000 rabbits actually means by local customs
1200 rabbits.

 6th

exception: Historical
surrounding circumstances

The

backround

and

document historical backround and surrounding

circumstances that leads to its creation but cannot adduce pre
negotiation transaction to discover the intention of the parties.
See Keng Huat Film S/B v Makhanlall (Properties) Pte Ltd
[1984] 1 MLJ 243 cited Prenn v Simmonds [1971] 3 All ER
237 and Phiong Khon v Chonh Chai Fah [1970] 2 MLJ 114.
In Prenn v Simmonds [1971] 3 All ER 237, 241 where Lord
Wilberforce had said per curiam at page 241 that,
evidence of negotiations, or of the parties' intentions ...
ought not to be received, and evidence should be restricted
to evidence of the factual background known to the parties at
or before the date of the contract, including evidence of the
'genesis' and objectively the 'aim' of the transaction.
In Phiong Khon v Chonh Chai Fah [1970] 2 MLJ 114, the
court allowed extrinsic evidence to be given to help interpret the
document. Evidence of surrounding circumstances is
admissible.

 7th exception: Recital of contract:

In Ganam d/o Rajamany v Somoo s/o Sinnah [1984] 2

MLJ 290, any agreements in written form include recitals in

the contract, which is different from the terms of contract. If
there is a dispute as to the instruments, can give extrinsic
evidence. It is not prohibited to do so.

In the Privy Council case of Sah Lal Chand v Indarjit

[1899-1900] 27 IA 93 where it was held that (i) section 91 of

the Indian Evidence Act (which is in the same terms with
section 92 of our Evidence Act 1950) does not
preclude/prevent oral evidence to contradict a recital of fact
in a written contract and (ii) it is settled law that,
notwithstanding an admission that the consideration has been
received, it is open to the vendor to prove that no
consideration has been actually paid.