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Gallen v Allstate Grain Co. (1984), 9 D.L.R. (4th) 496, 53 B.C.L.R. 38 (C.A.)


Oral representation from A to G. G signed contract with A. Representation was wrong about grain crop


Is the oral evidence admissible, and if so can it vary or contradict the signed contract?


Exceptions to parol evidence rule:
*To show contract was invalid bc of fraud, misrepresentation, mistake, incapacity, lack of consideration, or lack of contracting intention
*To dispel ambiguities, to establish a term implied by custom, or to demonstrate factual matrix of agreement
*In support of a claim for rectification
*To establish a condition precedent to the agreement
*To establish a collateral agreement
*In support of allegation that doc itself wasn’t intended by parties to be the whole agreement
*In support of a claim for equitable remedy
*In support of a blain in tort that oral statement was a breach of duty of care


When deciding if a warranty – it is a promise so it might be part of the contract, or might be collateral contract
**Look at intention – is it a promise or statement of fact

A collateral agreement cannot be established where it is inconsistent with or contradicts the written agreement (Hawrish)
**This principle is not absolute (Hawrish demonstrates this)
**Exception: if the contract is induced by an oral misrepresentation that is inconsistent with the written contract, the written contract cannot stand
**“Adding to” “subtracting from” “varying” – nothing wrong with that
***The statement is only when contradicts
**It is only a presumption in favour of written contract – it can be rebutted

Harmonious construction rule – the parties cannot have intended to agree to inconsistent obligations
**Rule only applies where both obligations have contractual force

Once it is established that the oral representation was a warranty then:
*The oral evidence is admissible
*Oral warranty and doc must be interpreted together
*If no contradiction then principle in Hawrish has no application
*If there is contradiction then just a strong presumption in favour of the written doc – the rule is not absolute


Oral evidence is permissible bc the oral representation was a warranty before the K was signed


It doesn’t matter whether it is part of the main contract (one contract analysis) or a separate collateral contract (2 contract analysis) the result should be the same regardless of the approach taken
**One contract – parol evidence doesn’t apply – bc it is considered the same contract
***If warranty is classified as a guarantee then you look at the one contract
**2 contract you have to go through the analysis above about Hawrish and the presumption

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