Heading: Lee v. Joseph E. Seagram and Sons, Inc., US Court of Appeals, 552 F.2d 447 (1977) p 314.

Facts: The Lees owned a 50% interest (stocks) in a Capital City Liquor Company – a corporation. In May 1970 Harold Lee, the father, agreed to sell their interest but conditioned his offer on Seagram’s agreement to relocate Harold and his sons in a new distributorship of their own in a different city. The other 50% was owned by an extended Lee family. The promise to relocate the father was never reduced to writing. The suit arose because Lee claimed a breach of the oral agreement to relocate the sons. He claimed that Seagram had opportunities to procure another distributorship for the Lees but had refused to do so. Seegram says it is inadmissible to add to the terms of an integrated written agreement. Seegram claims the document was completely integrated.

Procedure: Seagram appealed after the district court entered a judgement in the amount of $407,850 in favor of the plaintiffs on a claim asserting common law breach of an oral contract.

Issue: Is the oral promise to the plaintiffs, as individuals, an acceptable term of the contract for the sale of assets by a corporation in which the plaintiffs have only a 50% interest, considering as well the history of their relationship to Seagram? Did the parties intend the written agreement to be completely integrated?

Rule: When parol evidence is does not change the essence of the contract it can be admitted???????? Parol evidence is inadmissible to contradict the terms of partially integrated written agreement. Parol evidence is inadmissible to add (supplement) the terms of a completely integrated written agreement.

Holding: The oral agreement did not vary or contradict the money consideration recited in the contract as flowing to the selling corporation and therefore the parol evidence can be used in interpreting the contract. Contract was not intended to be completely integrated.

Rationale: The relationship between Seagram and Lee was one of a long time friendship. There was little reason to doubt the strength of the promise made between them. There was no integration clause in the contract either. And the terms of the sales agreement would not be altered by this promise.

Policy/Notes: Question to ask about parol evidence: what is the parol evidence being offered to prove?

Completely integrated means final and complete. (document contains everything that was to be agreed to)

Partially integrated means final as to the terms in the document. (in this usage final and complete do not mean the same things)

Completely Integrated: contract covers everything that is to be in the scope of the contract. Nothing besides what is written in the contract will be considered.

If the contract was not a complete integration, then the parole evidence has no application.