What is Extrinsic Evidence?
In contract law, extrinsic evidence is information related to a contract that isn’t actually included in the contract. This information often includes details about the circumstances under which the contract was signed. Extrinsic evidence can be used to determine the parties’ intent and the meaning of contractual terms when they’re unclear or ambiguous.
Example
Two parties sign a contract for a repairman to fix a woman’s house. However, the contract doesn’t state when the repairman will be paid. Text messages between the parties establishing the payment date as no later than thirty days after full performance of the contract may be used as extrinsic evidence to clarify when payment should be rendered.
Case Examples:
- Clear meaning: If terms are clearly defined in a contract, extrinsic evidence is not necessary. See Bohler-Uddeholm Am., Inc. v. Ellwood Grp., Inc., 247 F.3d 79, 92 (3d Cir. 2001). In Ellwood, the plaintiff sued the defendants for breach of contract, alleging vague terms in the contract. Id. The Court found that some of the terms were clearly defined in the contract; therefore, extrinsic evidence was not necessary. Id. As the Court stated, “where the intention of the parties is clear, there is no need to resort to extrinsic aids or evidence. . . instead, the meaning of a clear and unequivocal written contract must be determined by its contents alone.” Id.
- Whether a term in the contract is ambiguous is a matter of law, not fact. This means that it will be decided by the judge rather than by a jury. See Meyer-Chatfield v. Century Bus. Servicing, Inc., 732 F. Supp. 2d 514, 519 (E.D. Pa. 2010).
- What must a court review when determining whether a term is ambiguous: In Century, the Court ruled that “in determining whether a contract term is ambiguous, a court must consider the actual words of the agreement themselves, as well as any alternative meanings offered by counsel, and extrinsic evidence offered in support of those alternative meanings.” Meyer-Chatfield v. Century Bus. Servicing, Inc., 732 F. Supp. 2d 514, 519 (E.D. Pa. 2010). In Century, the plaintiff company sued Century for poaching some of its employees, claiming that Century had violated a non-solicitation clause in the contract. Id. The Court found the non-solicitation clause ambiguous and held that extrinsic evidence was admissible to determine the clause’s meaning. Id.
Further Reading
For more detailed information, see our related Evidence terms:
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