Matthews v. Drew Chem. Corp. - 475 F.2d 146 (5th Cir. 1973)

Rule:

Parol evidence cannot be used to vary one of the written terms of a partially integrated document where the particular term is complete and perfect on its face, without ambiguity. Even where parol evidence has been admitted to show some general or specific intent, that evidence may not be used to change the meaning of whatever unambiguous terms do appear in the writing.

Facts:

Plaintiff M.M Matthews alleged wrongful termination against defendant Drew Chemical Corporation in a diversity action. Defendant argued that an executed memorandum of employment permitted the employment relationship to be terminated upon notice to either party and that plaintiff breached the contract by failing to submit work reports as required under the agreement. At the trial, plaintiff did not dispute the existence of the written memorandum of employment. Rather, plaintiff based his breach of contract claim on additional oral agreements that were allegedly entered, well before the writing was signed, and that allegedly remained in effect at all times thereafter. Despite defendant’s insistence that an express integration clause contained in the written agreement barred the introduction of parol evidence regarding the terms and conditions of plaintiff’s employment, such evidence was admitted. The district court entered judgment for plaintiff. Defendant appealed. 

Issue:

Notwithstanding the existence of the written memorandum of employment, could plaintiff use the oral agreement to prevail on his breach of contract claim? 

Answer:

No.

Conclusion:

On review, the court reversed and held that defendant was entitled to judgment because the written termination clause was controlling. Applying the parole evidence rule, the court reasoned that a prior oral agreement alleged by plaintiff could not be used to determine if the parties intended the written memorandum to be a total integration of their employment agreement, or to alter the unambiguous termination provision in the memorandum. The court concluded that plaintiff's parole evidence was put to improper use because it was admitted for purposes of convincing the jury that the alleged prior oral agreement required a showing of good cause before notice of termination could be given. Accordingly, judgment was rendered in favor of defendant.