Crawford v. France
219 Cal. 439, 1933 Cal. LEXIS 413, 27 P.2d 645 (1933)
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Rule of Law:
Parol evidence is admissible to establish a term of a contract when the written instrument is silent on that term and the writing is incomplete on its face or contains an ambiguity.
Facts:
- An architect and an owner entered into a written contract for the design of a hotel building.
- The contract stated the architect would 'design a hotel building suitable for the needs of the Owner' but was silent on a maximum construction cost.
- The architect's fee was to be calculated as a percentage of the work's cost.
- The architect prepared plans and specifications, which the owner initially found satisfactory.
- The lowest construction bid received based on the architect's plans was over $61,000.
- The owner had orally informed the architect that the construction cost should not exceed $45,000.
- Upon receiving the $61,000 bid, the owner abandoned the project due to the excessive cost.
- The owner refused to pay the architect's fee.
Procedural Posture:
- The architect (plaintiff) sued the owner (defendant) in a trial court to recover his professional fee under the written contract.
- The owner asserted as an affirmative defense that the architect breached a prior oral agreement to design a building that would not cost more than $45,000.
- The trial court permitted the owner to introduce parol evidence of the oral agreement regarding the cost limitation.
- Judgment was rendered in favor of the owner (defendant).
- The architect (plaintiff) appealed the judgment to the reviewing court.
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Issue:
Does the parol evidence rule bar the admission of testimony about a prior oral agreement that set a maximum construction cost when the written contract for architectural services is silent on the cost but requires a design 'suitable for the needs of the Owner'?
Opinions:
Majority - Thompson, J.
No. The parol evidence rule does not bar the admission of testimony about the prior oral agreement. Parol evidence is admissible to supplement a written contract that is incomplete on its face or to clarify an ambiguity. Here, the written contract was incomplete because it was silent on the cost of construction, which was a material term essential for determining the architect's fee. Furthermore, the contract contained an ambiguity in the phrase 'suitable for the needs of the Owner.' The owner's financial limitations are an integral part of their 'needs,' and parol evidence is permissible to explain what those needs were, including the agreed-upon cost ceiling of $45,000. This evidence does not contradict the written terms but rather supplements and explains them.
Analysis:
This decision reinforces a significant exception to the parol evidence rule, specifically for incomplete or ambiguous contracts. It establishes that when a writing is silent on a fundamental term like cost, and especially when it uses subjective language like 'suitable for the needs,' courts may allow extrinsic evidence to supply the missing term. The case serves as a caution for contracting parties to ensure all material terms, particularly budgetary constraints, are explicitly included in the written agreement to avoid later disputes. It demonstrates that the 'four corners' of a document are not impenetrable if the document itself suggests that the entire agreement has not been reduced to writing.
