Legal Memorandum: Parol Evidence Rule in MN

Issue: When does the parol evidence rule pose an impediment to an oral agreement under Minnesota Law?

Ordinarily, “[a]n oral agreement that an instrument need not be paid, need not be paid as scheduled, need not be paid on a certain contingency, . . . [or may] not be sued on when due . . . is . . . in violation of the parol evidence rule.”  11 Richard Lord, Williston on Contracts § 33:35 (4^th ed. 2011).  However, under Minnesota law, parol evidence is generally admissible to show the subsequent modification of an original contract.  Nord v. Herreid, 305 N.W.2d 337, 339-40 (Minn. 1981); accord LaPanta v. Heidelberger, 392 N.W.2d 254, 258-59 (Minn. Ct. App. 1986); Duffy v. Park Terrace Supper Club, Inc., 295 Minn. 493, 498, 206 N.W.2d 24, 27 (1973); Hafiz v. Midland Loan Fin. Co., 206 Minn. 76, 78, 287 N.W. 677, 678 (1939).  Thus, in In re Estate of Giguere, 366 N.W.2d 345, 347 (Minn. Ct. App. 1985), the court allowed parol evidence to show a new agreement between the parties that delayed enforcement of a promissory note by providing an extension of time for payment.  Note that the evidence offered “must be clear and convincing to justify setting aside a written contract and holding it as abandoned or substituted by a subsequent parol contract at variance with its terms.”  Norwest Bank of Minn., N.A. v. Midwestern Mach. Co., 481 N.W.2d 875, 881 (Minn. Ct. App. 1992) (quotation omitted).