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Collateral Contract Doctrine

Definition

An exception to the parol evidence rule. The parol evidence rule does not exclude extrinsic evidence of a prior or contemporaneous oral agreement that is independent of, collateral to, and not inconsistent with the written contract, and which would not ordinarily be expected to be embodied in the final writing. The collateral contract doctrine applies even in the presence of a merger clause in the contract by permitting extrinsic evidence of prior oral or written agreements that are different from and do not seek to explain the final agreement.

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