Dear Colleagues:

A student posed an interesting question today:

Assume shareholders passed a resolution, (to reallocate shares or change share classes). Assume that the board then did something else on the grounds that this other thing was discussed but not included in the actual resolution. I.e., this is what we really meant...

Can the shareholders rely on the parol evidence rule to keep out evidence of these other discussions and enforce the resolution as written?

In short, would the parol evidence rule apply to a shareholder resolution or does it apply only to traditional contracts?

I want to say yes but don’t have any case for saying so.

Am I right?

Any thoughts greatly appreciated.

Thanks

Matt

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Matthew P Harrington
Professeur
Faculté de droit
Université de Montréal
www.commonlaw.umontreal.ca
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