Wednesday, September 06, 2006

parol evidence - real estate contracts

Lutzky v. Petcove - ED Pa - August 21, 2006

Plaintiffs permitted to use parol evidence in fraud claim on real estate contract. The parol evidence rule bars oral evidence about the terms of a written contact "when prior statements and representations (1) contradict, conflict, add, modify or vary the terms of a contract and (2) fall within the scope of the integrated agreement…..In Pennsylvania, an exception to the parol evidence rule exists for 'real estate inspection cases.'"

These cases require a court to "balance the extent of the party's knowledge of objectionable conditions derived from a reasonable inspection against the extent of the coverage of the contract's integration clause in order to determine whether than party could justifiably rely upon oral representations without insisting on further contractual protection or the deletion of the overly broad integration clause."