What term describes oral or written words that explain ambiguous parts of a contract?

The term that describes oral or written words that clarify ambiguous parts of a contract is known as Parol Evidence. This legal principle allows parties to introduce external statements, conversations, or writings that were made prior to or at the time of the contract signing to help interpret its terms.

In contract law, when the contract language is unclear or ambiguous, Parol Evidence can serve as a valuable tool to shed light on the intent of the parties involved. Courts may allow this type of evidence to establish context, clarify meanings, or resolve ambiguities that may affect the interpretation of the contract.

This principle is especially relevant when the written contract does not fully encapsulate the agreement made between the parties, and it serves to ensure that intentions and understandings are honored in legal proceedings. Hence, the reliance on Parol Evidence is crucial in instances where contract clarity is essential for enforcement and understanding of obligations.