Don't Just ‘Shake On It'

It is not uncommon for the contracting parties to a written agreement to verbally agree on additional terms or terms which are intended to vary the content of the written agreement. This is often done with honest intentions, as having to conclude additional or varying terms in writing to the existing agreement may be perceived as an unnecessary hindrance to efficiently doing business. Parties eager to "get things done" will often simply "shake on it", relying on the belief that that the other party will honour its verbal undertaking.

Such verbal varying of written contractual terms generally work out well for the contracting parties, until they don't! In this regard, our law restricts the nature and extent of the evidence that may be brought when a dispute arises regarding the content and meaning of a written agreement. The applicable principle is known as the Parol Evidence Rule.