Extrinsic Evidence: Definition, Example and Related Terms
What is Extrinsic Evidence ?
Extrinsic evidence is information that comes from outside the actual contract or agreement. It's like a friend who wasn't at the party, but heard about what happened and can give you extra details. In a business contract, this could be emails, conversations, or other documents that weren't included in the final contract but can help explain what the people involved in the contract meant or intended when they agreed to it. For a contracts manager, understanding extrinsic evidence can be very important because it can help clear up any confusion or disagreements about what the contract means or how it should be carried out.
Example Scenario Imagine a company called TechCorp signs a contract with another company, BizBros, to buy 100 computers. The contract says that TechCorp will pay $1000 per computer. But after the contract is signed, TechCorp says they understood the price to be $900 per computer because of an email conversation they had with BizBros before the contract was signed. In this case, the email conversation is extrinsic evidence. It wasn't included in the contract, but TechCorp is using it to try to prove that they and BizBros agreed on a different price. A contracts manager would need to look at this extrinsic evidence and decide whether it changes how the contract should be interpreted. Let's say a company, FoodInc, agrees to a contract with a supplier, AgriGrow, to purchase a certain type of apple for their juice production. The contract doesn't specify the type of apple, just that it should be 'suitable for making juice'. Later, there's a disagreement because AgriGrow delivers a type of apple that FoodInc doesn't think is suitable for their juice. Here, the phrase 'suitable for making juice' is ambiguous, and extrinsic evidence might be needed to figure out what it means. This could be emails or conversations where the companies discussed what type of apple to use. A contracts manager would need to look at this extrinsic evidence to help decide what the contract meant by 'suitable for making juice'. A new software company, SoftServe, signs a contract with a larger company, BigTech, to provide them with software development services. The contract outlines the scope of work but doesn't specify certain technical requirements. Later, a dispute arises over whether SoftServe has met those requirements. In this situation, any prior communications or documents discussing those technical requirements would be considered extrinsic evidence. They can be used to clarify what both parties intended when they agreed to the contract. A contracts manager would have to review this evidence in resolving the dispute.