All students and, in particular, all past students of the law of contract should have heard of the parol evidence rule. Many, if not most, will have avoided devotion to it of any detailed study. Those who have some familiarity with the topic are not unlikely to have acquiesced in the explanation afforded by the Law Commission in 1976 in its Working Paper canvassing views for possible reform1. At that time, the Commission adopted Lord Morris’s formulation of the rule in Bank of Australasia v. Palmer 2:

In practice, there always have been a large number of instances where evidence extrinsic to the documentary record of contract terms has been admitted3. However, the statement of Lord Morris’s proposition as a “rule” (particularly one with such a distinctive title), the recording of situations in which extrinsic evidence has been admitted as “exceptions” to the rule, and a superficial understanding of the general law and practice as to admissibility of evidence of contract terms, have no doubt not infrequently led to the assumption that the correct general approach in all cases where there is any written record of contract terms is to exclude any other evidence of the agreement.

Ten years after publication of its Working Paper—and, interestingly, with a completely different body of Commissioners—the Law Commission has published its Report4. In its work, the Commission was concerned with the competing claims that, on the one hand, the parol evidence rule was an essential rule to uphold the certainty of contractual statements in documents and, on the other, that it excluded evidence which had to be admitted if justice were to be done. However, these difficulties were found to be largely illusory, for the Commission has concluded that the rule as stated above does not today have either the width or the effect once attributed to it and, in particular, does not require a court to exclude or ignore evidence necessary for ascertaining and giving effect to the parties’ true intention. Therefore, reversing the provisional conclusion in its Working Paper that the rule be abolished, the Commission has recommended that no legislative action be taken to try to reform or even to clarify the rule.

The Commission’s Report is, therefore, only likely to have practical effect where understanding of the current law is based on an outdated conceptior of the rule. In practice, all relevant evidence is potentially admissible to discover the parties’