What is the parol evidence rule, and when is extrinsic evidence admissible?

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The parol evidence rule centers on keeping a final written contract as the complete expression of the agreement. When that writing is fully integrated, extrinsic (outside) evidence cannot be used to contradict or vary its express terms. But extrinsic evidence isn’t banished entirely. It’s admissible to interpret terms that are ambiguous and to prove defenses to enforcement, such as fraud, duress, misrepresentation, lack of capacity, mistake, or unconscionability. It can also be used to show that the contract isn’t fully integrated or that there was a separate collateral agreement that doesn’t alter the main writing.

So the best answer reflects that a fully integrated contract cannot be contradicted by outside evidence, but outside evidence can help interpret ambiguous language or prove defenses like fraud or duress. The other statements are incorrect because they either claim extrinsic evidence can always contradict the writing, or they suggest extrinsic evidence is never allowed, or they misstate when such evidence applies.