Judicial Misuses of the Word Fraud to Defeat the Parol Evidence Rule and the Statute of Frauds

The courts, of course, continue to recognize that the Parol Evidence Rule exists and to pay lip service to it. However, they have developed a series of so called exceptions to its application, and lawyers for litigants have learned these exception lessons well. Thus, whenever a client becomes unhappy with one or of more of the terms of a written contract which he signed, his lawyer likely will fish out one of these exceptions in an effort to excuse his client from it. Unfortunately, many Ohio lawyers will not realize that their Supreme Court in its Marion Production Credit Association decision has made this significant contribution to the legal authorities dealing with the fraud exception to the Parol Evidence Rule. Indeed, the court itself apparently did not realize it. Quite to the contrary, Justice Holmes, writing for the court, thought he was analyzing a problem involving the Statute of Frauds! But, as will be pointed out below, this was an error. Apparently, there were two reasons for this judicial goof. One reason was because the court was led astray by the lawyers. The other was that the court used the word fraud imprecisely. These are worth discussing because the same two reasons often lead our courts into error