Law School Case Brief
Gold Kist, Inc. v. Carr - 886 S.W.2d 425 (Tex. App. 1994)
The parol evidence rule precludes consideration of extrinsic evidence to contradict, vary, or add to the terms of an unambiguous written agreement absent fraud, accident, or mistake. Whether a contract is ambiguous is a question of law for the court to decide by looking at the contract as a whole in light of the circumstances present when the contract was entered. A contract is ambiguous when its meaning is genuinely uncertain and doubtful or when it is reasonably susceptible to more than one meaning. If a contract can be given a certain or definite legal meaning or interpretation, it is not ambiguous; and the court will construe the contract as a matter of law.
Appellee peanut hauler Edward C. Carr entered into a written agreement with appellant Gold Kist, Inc., which operated a peanut shelling plant, to purchase trucks and peanut hauling equipment from Gold Kist. Carr later sued Gold Kist for damages alleging breach of contract, promissory estoppel, and fraud. The trial court entered a judgment in favor of Carr awarding him $ 570,401 in actual damages and $ 250,000 in exemplary damages plus prejudgment interest and attorney's fees. The trial court also granted Gold Kist an offset of $ 36,568 on its counterclaim against Carr for payment on his promissory note. Gold Kist challenged the judgment on several grounds. Gold Kist contended that Carr's breach of contract claim was barred by the parol evidence rule and the statute of frauds and that the trial court erred in entering express findings as to Carr's claim of promissory estoppel. Gold Kist also attacked the jury's finding of fraud.
Was there an obligation on the part of peanut sheller Gold Kist to engage Carr’s services to haul its peanuts?
The central issue in Carr's suit was whether or not Gold Kist granted him the exclusive right to haul its peanuts. The appellate court reversed the judgment because the parol evidence rule precluded consideration of extrinsic evidence to contradict, vary, or add to the terms of an unambiguous written agreement absent fraud, accident, or mistake. The Gold Kist-Carr contract provided that "Gold Kist, from time to time, may, but shall be under no obligation to, engage you to haul commodities on its behalf." Considering this sentence in light of the contract as a whole and in light of the surrounding circumstances, the court concluded that the contract was not ambiguous. Because the contract was unambiguous, the court gave effect to the objective intention of the parties as expressed or as was apparent in the written agreement. Under the plain language of the contract, Gold Kist had no obligation to engage Carr's services for the hauling of peanuts. Carr's interpretation contradicted the express language of the contract. There was no evidence that Carr was induced by fraud to agree to the provision in the contract. At most, the record showed that that plant manager Holland had made a representation regarding the legal effect or interpretation of a document; this did not constitute fraud.
Access the full text case
Not a Lexis Advance subscriber? Try it out for free.
Be Sure You're Prepared for Class