Two doctrines frequently arise in Pennsylvania jurisprudence when addressing disputes between the parties to a contract: the parol evidence rule and the gist of the action doctrine. While each serves a distinct purpose, their application often overlaps, especially in fraud cases between the parties to a contract. Understanding both rules is essential for practitioners to craft persuasive arguments.

The parol evidence rule’s purpose is to preserve written contracts’ integrity. It prohibits using contemporaneous or earlier agreements that contradict, modify, or supplement the terms of an integrated written agreement. Among the factors the courts consider to determine whether a written contract is fully integrated, an integration clause within a contract is a clear sign. Such a clause explicitly states that the written contract represents the entire agreement between the parties, superseding any earlier negotiations or representations. See e.g., Yocca v. Pittsburgh Steelers Sports, 854 A.2d 425 (Pa. 2004). Pennsylvania courts recognize two types of integration: complete and partial. For partially integrated contracts, extrinsic evidence, such as oral agreements, may explain or supplement the agreement but cannot contradict its terms. Generally speaking, in cases of complete integration, no extrinsic evidence may be introduced to alter or add to the written terms. However, the parol evidence rule does not prevent the use of extrinsic evidence for other purposes. See Berger v. Pittsburgh Auto Equipment, 127 A.2d 334 (Pa. 1956) (allowing evidence of a misrepresentation “not to alter or vary” the terms of an integrated contract, but to rescind it); Estate of Herr, 161 A.2d 32 (Pa. 1960) (finding that parol evidence is admissible to explain or clarify or resolve the ambiguity within the contract).