Facts of the Case
‘A’ entered into a written agreement to sell his car to ‘B’. The agreement stated that the sale price would be Rs. 1,00,000/- or Rs. 1,50,000/-, without specifying which amount was agreed upon.
At the time of trial, ‘A’ seeks to adduce oral evidence to prove which of the two prices was actually intended.
The question arises whether parol (oral) evidence can be admitted to clarify or alter the terms of a written agreement under the Indian Evidence Act, 1872.
Issues in the Case
- Whether oral evidence is admissible to prove the exact price when the written agreement mentions two different figures?
- Whether the parol evidence rule under Section 91 of the Indian Evidence Act applies in this situation?
- Can ‘A’ use oral evidence to contradict, vary, or clarify the written contract?
Legal Principles Covered to Support Case Proceedings and Judgments
A. Parol Evidence Rule – Section 91, Indian Evidence Act, 1872
Section 91 provides that when the terms of a contract have been reduced to writing, no evidence of any prior or contemporaneous agreement is admissible to contradict, vary, or add to the written terms, except in the following situations:
- To prove a condition precedent to the contract,
- To show fraud, misrepresentation, or mistake,
- To explain ambiguity in the written instrument.
B. Ambiguity in Written Terms
Here, the contract mentions two possible prices, creating a clear ambiguity.
- The parol evidence rule allows oral evidence to explain the ambiguity.
- The purpose is to determine the true intention of the parties without altering the substance of the written contract.
Illustration: If a written contract mentions two conflicting prices, oral evidence can be admitted to clarify which price was mutually intended.
C. Limitations
- Oral evidence cannot be used to contradict or override clear written terms.
- Evidence is admissible only to clarify ambiguities or explain the context.
- The court will examine whether the oral evidence genuinely reflects the intention of the parties or is an attempt to alter the contract unfairly.
D. Judicial Interpretation
- In K.K. Verma v. Union of India, the court held that oral evidence is admissible to explain ambiguity in writing, but cannot contradict explicit terms.
- Courts consistently uphold that written contracts are primary evidence; parol evidence is secondary and limited.
Possible Judgment
The Court is likely to hold that:
- The written agreement mentioning two possible prices is ambiguous.
- Under Section 91 of the Indian Evidence Act, 1872, ‘A’ can adduce oral evidence to clarify which price was actually agreed upon.
- Oral evidence is admissible not to contradict or vary the written contract but to resolve ambiguity and ascertain true intention.
- The court will evaluate the credibility of the oral testimony alongside the written agreement to determine the correct sale price.
Final Decision
Yes, it is permissible for ‘A’ to produce oral evidence to clarify the exact price in the written contract, as the contract is ambiguous, and the evidence is intended to explain, not contradict, the written terms, in accordance with Section 91 of the Indian Evidence Act, 1872.
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