George v. Davoli

Brief Fact Summary. The Plaintiff and the Defendant entered into a contract for the sale of certain pieces of jewelry.  The contract did not include a provision concerning the return of the jewelry, but the parties had a contemporaneous oral conversation as to when the jewelry would be returned.

Synopsis of Rule of Law. Under § 2-202 of the Uniform Commercial Code ("UCC"), when analyzing parol evidence, for a term "[t]o be inconsistent the term must contradict or negate a term of the writing. A term or condition which has a lesser effect is provable."  Also, evidence is inadmissible "only where the writing contradicts the existence of the claimed additional term."

Facts. This case involves the sale of certain pieces of jewelry on approval.  Both the Plaintiff and the Defendant signed a Memorandum of sale (the "Memorandum") documenting the sale of this jewelry.  The Memorandum specified that "the Plaintiff was purchasing certain Indian jewelry for the sum of $500.00, but if the jewelry were not acceptable, the seller would accept its return and refund $440.00 of the purchase price to the seller."  There is no indication from the Memorandum when the jewelry had to be returned.  The trial court allowed the Defendant to testify about an alleged contemporaneous oral agreement between the buyer and seller specifying that the jewelry had to be returned by the following Monday evening or the sale would be treated as consummated.  The Defendant was not contacted by the Plaintiff until two days after the orally agreed upon deadline.  The Plaintiff wanted $440, but the Defendant refused to pay.

Issue. Is evidence of the contemporaneous oral agreement admissible?

Held. Yes.  Section 2-202 of the UCC governs this dispute.  This section "compels a court to allow oral testimony supplementing the written agreement where not inconsistent and where the writing is not intended as a complete and exclusive statement of the terms of the agreement."  The court determined that the absence of an agreed upon time limit to return the goods is the "type of omission which comes within the area provided for in this statute."  In addition "[t]here is nothing inconsistent with the Defendant's testimony inasmuch as the written memorandum makes no reference to the time of return of the merchandise. Likewise it cannot be said that the written memorandum is a complete and exclusive statement of the terms of the agreement since the time of return is an important part of the arrangement between the parties. Is it therefore such an additional term that the parties would certainly have included it in the written document if it had been agreed upon and consequently one not to be admitted on trial?"  According to [Hunt Foods & Ind. v. Doliner] "[t]o be inconsistent the term must contradict or negate a term of the writing. A term or condition which has a lesser effect is provable."  Also, evidence is inadmissible "only where the writing contradicts the existence of the claimed additional term."  As such the court held, "parol evidence as to the agreement setting forth the time within which the merchandise was to be returned if not acceptable, is admissable to supplement the written memorandum" and the Defendant was under no obligation to accept the return of the goods.

Discussion. This case offers a good example of how the UCC's Parol Evidence role is applied.