Under Section 94 BSA 2023, the terms of a written contract cannot be proved except by the document. But oral evidence is admissible to show certain collateral facts. Which of the following is admissible despite Section 94 BSA?
- A
Evidence that the written price was different from the agreed price
- B
Oral evidence may prove a collateral matter not contradicting the written terms.
- C
Evidence of terms discussed during negotiation that were not included in the written contract
- D
Evidence that a different person was the intended party to the contract
View answer and explanation
Correct answer: B. Oral evidence may prove a collateral matter not contradicting the written terms.
Section 95 BSA Proviso 3 (Section 92 IEA Proviso 3): 'Nothing in this section shall be deemed to affect the admission of evidence of a separate oral agreement constituting a condition precedent to the attaching of any obligation under any such contract, grant or disposition of property.' A CONDITION PRECEDENT is an oral agreement that the document will not take effect unless a specified event occurs. Example: The parties sign a written agreement to sell property but orally agree that the agreement will only bind them IF the seller obtains a No Objection Certificate from the government. If the NOC is not obtained, the seller wants to argue the contract never took effect. The oral condition precedent is admissible under Section 95 Proviso 3 BSA. Contrast: oral evidence of a DIFFERENT PURCHASE PRICE (Option A) would directly contradict the written contract and is inadmissible; oral evidence of terms OMITTED from the written contract (Option C) would add to the document's terms and is generally inadmissible unless the specific exceptions apply.
Source note: BSA 2023 Section 95 Proviso 3