Reference no: EM133258372

Hi-Tech Industries is developing a new handheld personal computer system, allowing high-end computer gaming anywhere, any time. It negotiates with Lost Stars Pty Ltd, for the purchase of suitable electronic components. Before signing the contract, Hi-Tech Industries asks Lost Stars Pty Ltd whether the central processing unit selected can withstand high temperatures. (It expects that its customers will use the new gaming device in popular, and very hot, holiday destinations.) Lost Stars Pty Ltd assures Hi-Tech Industries that it can. Hi-Tech Industries tells Lost Stars Pty Ltd that this is the decisive factor in its conclusion of the contract, as Lost Stars Pty Ltd's competitors could not provide this assurance. Hi-Tech Industries signs the contract, but does not read it. The contract states that payment must be made in full, upon delivery of the electrical components (which are listed in the contract) in three months' time. The contract does not contain any heat guarantees regarding the central processing units. After the computer system is released into the market, Hi-Tech Industries receives many reports of central processing unit failures from customers using the device in very hot regions of the world.

According to the parol evidence rule, which of the following statements is INCORRECT?

a. The parol evidence rule allows parties to put forward evidence of oral promises given both before and after written contracts are signed. As a result, Lost Stars Pty Ltd's oral statement about the central processing units will be incorporated into the contract.

b. The parol evidence rule will not protect parties who have behaved badly, such as in the case of a fraud (ie. intentionally deceptive misrepresentations made by one party to another).

c. Where a contract is in writing and appears to be the complete agreement between the parties, it is presumed that the written document is the entire agreement between them, and evidence that would add to, vary, or contradict the written agreement cannot be introduced by the parties. As a result, Lost Stars Pty Ltd's oral statement about the central processing units would be excluded from the written contract.

d. Any evidence that the written contract is illegal will be allowed to be given as an exception to the parol evidence rule.