While misrepresentation and fraud are exceptions to the parol evidence rule, such an argument is usually raised to vitiate an agreement rather than uphold it. The kinds of statements the applicant is alleging were made in this case are not really misrepresentations (i.e. statements clearly wrong on their face) but rather are representations about the extent and scope of the duties to be assigned. The contract law principles related to representations that apply here are the principles relating to collateral contracts and warranties. As a general rule, parol evidence is admissible to establish a representation that induced someone to enter into a contract (i.e. to establish there was a distinct collateral agreement), but such evidence is only admissible to establish such a distinct collateral agreement where the oral evidence is not contradictory or inconsistent with the written contract (i.e. where the written agreement is silent). In this case the written contract is not silent on this point but rather has a provision that expressly addresses the duties to be assigned to the applicant. In order for a collateral agreement to be binding upon the parties, there must be a clear intention to create a binding agreement: see Hawrish v. Bank of Montreal, 1969 CanLII 2 (SCC), [1969] S.C.R. 515. In my view, there is no proper basis upon which to make such a finding where the parties expressly addressed the duties to be assigned to the applicant in the settlement agreement with a provision that did not include the representations upon which the applicant seeks to rely.
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