Admitting Extrinsic Evidence in California

February 2008

Though the California Supreme Court has skated around the issue, it has never abandoned the extrinsic evidence rule in contruing contracts. Here is a look at what that means for litigants.

General Credit

1.

The Williston "plain meaning" school limits contract interpretation to the four corners of a written agreement.

True False

2.

Under the Corbin approach, extrinsic evidence is admissible only if a party makes a preliminary showing that an agreement is ambiguous.

True False

3.

The <i>PG&E</i> court held that it is improper to interpret a contract without the benefit of extrinsic evidence of the circumstances surrounding the inception of the agreement.

True False

4.

The Corbin approach to contract interpretation advocates that what initially appears to be plain and clear language may be shown to be ambiguous in light of the circumstances surrounding the agreement at the time it was entered.

True False

5.

California's extrinsic evidence rule is solely a common law development.

True False

6.

Some courts have questioned the wisdom of the <i>PG&E/Corbin</i> approach.

True False

7.

Even after provisionally considering extrinsic evidence that is offered, a court may decline to admit that evidence.

True False

8.

<i>PG&E</i> permits preliminary consideration of extrinsic evidence that is offered, but allows it to be stricken or discounted if, rather than clarifying the meaning of the contract, the evidence adds to or varies the terms of the contract.

True False

9.

In the decades since <i>PG&E</i>'s extrinsic evidence rule was announced, many cases have followed the rule rather than suggesting it should be abandoned.

True False

10.

California cases have held that the intent of the parties is to be ascertained, if possible, from the written provisions of the contract.

True False

11.

If a trial court admits evidence that does not support an interpretation to which a contract is reasonably susceptible, the court's decision will likely be reversed on appeal.

True False

12.

Extrinsic evidence is especially likely to be admitted when offered to interpret a choice of law clause in an international contract.

True False

13.

In 2006, the California Supreme Court retreated from the rule in <i>PG&E</i> when it decided <i>Dore v. Arnold Worldwide, Inc.</i> (9 Cal. 4th 384 (2006).)

True False

14.

Extrinsic evidence is never admissible to interpret a contract governed by the statute of frauds.

True False

15.

<i>PG&E</i> and <i>Corbin</i> consider the judge's experience a form of extrinsic evidence.

True False

16.

Oliver Wendell Holmes was an adherent to the Corbin theory.

True False

17.

Under <i>PG&E</i>, courts may properly exclude extrinsic evidence.

True False

18.

Court decisions have recognized that insurance-industry testimony and drafting-industry history can be useful as extrinsic evidence.

True False

19.

The Ninth Circuit has staunchly supported the decision and reasoning of <i>PG&E</i> since that case was decided.

True False

20.

Under <i>PG& E</i>, if the court concludes that a contract’s language is reasonably susceptible to either of two proposed interpretations, extrinsic evidence must be considered in construing the contract to determine its meaning.

True False

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