Rachel T Dube v Rhoda Muchetwa and The Registrar of Deeds

The applicant and first respondent concluded a written agreement of sale on 25 October 2006 for property in Chegutu for $29 million. The applicant paid the full purchase price by the due date. On the same day, the first respondent entered into a separate agreement with Everisto Marenga to purchase property in Glen View, Harare for $23 million. Both agreements were prepared by the same law firm. On 26 October 2006, before full payment, the applicant was advised that Marenga required an additional $3 million. The applicant agreed to pay this amount and executed an acknowledgment of debt in favour of Marenga, promising payment by 6 November 2006. She paid four days late. When the applicant requested occupation of the Chegutu property, she was advised the agreement had been cancelled because her late payment caused Marenga to cancel his agreement with the first respondent. The applicant sought an order compelling transfer of the property, arguing she was not party to the Marenga agreement and its cancellation had no effect on her contract.

• Whether the parole evidence rule applied to exclude evidence extrinsic to the written agreement of sale
• Whether there was a condition precedent to the agreement of sale that the first respondent successfully purchase property in Harare
• Whether the subsequent agreement between the applicant and Marenga varied the original agreement of sale
• Whether the application could be determined on the papers or whether conflicts of fact required oral evidence
• Whether the entire agreement clause in the contract precluded evidence of collateral agreements or conditions precedent

The application was dismissed with costs awarded to the first respondent.

The parole evidence rule (integration rule) is not of automatic application to all written contracts, even where parties stipulate that the written agreement constitutes the entire agreement between them. The rule is based on the presumed intention of parties that the written document embodies their entire contract; where evidence shows the parties did not so intend, the rule cannot apply. The parole evidence rule does not prevent the leading of evidence to show that a written contract was subject to a condition precedent not expressed in the document. Where a party's subsequent conduct (such as entering into a related ancillary agreement) demonstrates an intention to be bound by terms beyond those in the written contract, that party cannot successfully rely on the parole evidence rule to exclude evidence of those additional terms. The common intention of the parties should override all other considerations in contract interpretation.

The court made observations about procedural choices, noting that litigants must choose the form of proceedings with care and where a conflict of fact is apparent before proceedings are launched, application procedure should be avoided or the applicant risks dismissal. The court hinted at alternative arguments raised orally regarding unjust enrichment (the first respondent keeping both the purchase price and the property), noting this was an issue that did not require determination in these proceedings but suggesting the applicant should clearly formulate the cause of action she intends to bring. The court also observed that to allow the words parties used in a document to override their common intention would be to enforce what was not agreed upon, which is not the basis upon which the law of contract rests.

This case is significant in Zimbabwean contract law for clarifying the limits of the parole evidence rule and the entire agreement clause. It demonstrates that: (1) the parole evidence rule is not automatically applicable even where parties include an entire agreement clause; (2) extrinsic evidence is admissible to prove the existence of conditions precedent not expressed in a written contract; (3) a party's subsequent conduct may undermine reliance on the parole evidence rule where that conduct suggests the parties intended terms beyond those in the written document; and (4) litigants must choose their procedural route carefully where conflicts of fact are apparent, as proceeding by application where oral evidence is necessary risks dismissal.