Stephenson Brick Co. v. Bessemer Engineering Const.
1928 Ala. LEXIS 276, 118 So. 570, 218 Ala. 325 (1928)
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Rule of Law:
The parol evidence rule, which bars extrinsic evidence that contradicts a final written agreement, does not apply when an acceptance of a written offer is not identical and unconditional, but is instead accompanied by a contemporaneous verbal agreement that modifies its terms.
Facts:
- Bessemer Engineering & Construction Company (Bessemer) submitted a written proposal to Stephenson Brick Company (Stephenson) for excavation work.
- The proposal listed a 'lump sum price' of 47.5 cents per yard, but left the price for 'rock excavation' blank while specifying 'earth excavation'.
- Bessemer alleges that immediately after presenting the written proposal, the parties verbally agreed that the lump sum price was for 'earth and shale only' and that a reasonable price would be negotiated for any solid rock excavation encountered.
- Stephenson denies this verbal agreement occurred and contends it accepted the written proposal unconditionally.
- Bessemer proceeded with the work and excavated a significant amount of solid rock.
- After the work was completed, Stephenson sent Bessemer a check with a notation indicating it was 'payment in full'.
- Bessemer claims the parties then verbally agreed that Bessemer could cash the check without waiving its right to sue for the additional amount claimed for the rock excavation.
- Stephenson denies the existence of this second verbal agreement.
Procedural Posture:
- Bessemer Engineering & Construction Company (plaintiff) sued Stephenson Brick Company (defendant) in a trial court to recover a balance due for excavation work.
- A judgment was rendered for the plaintiff, Bessemer, in the amount of one cent.
- Bessemer filed a motion for a new trial, which the trial court granted, setting aside the judgment.
- Stephenson Brick Company, as appellant, appealed the trial court's order granting a new trial to this appellate court, with Bessemer as the appellee.
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Issue:
Does the parol evidence rule bar admission of evidence of a contemporaneous oral agreement that modifies the terms of a written proposal when the acceptance of that proposal was allegedly conditioned on the oral modification?
Opinions:
Majority - Gardner, J.
No. The parol evidence rule does not bar evidence of a contemporaneous verbal agreement that modifies a written proposal if the acceptance was conditioned upon that verbal agreement. An acceptance, to be effective in forming a binding contract based solely on the written offer, must be identical to the offer and unconditional. Here, Bessemer presented evidence that Stephenson's acceptance was not unconditional but was instead part of a larger transaction that included a verbal agreement to handle rock excavation separately. Because this evidence disputes whether the written proposal was ever intended to be the complete and integrated contract, the parol evidence rule is inapplicable. The conflicting testimony from Bessemer and Stephenson about the existence of this verbal agreement creates a question of fact that is properly for a jury to decide.
Analysis:
This decision reinforces the principle that the parol evidence rule only applies to a fully integrated contract—one that the parties intend to be the final and complete expression of their agreement. The case demonstrates that the question of integration itself can be a disputed issue of fact. When one party presents credible evidence that a written proposal was accepted only on the condition of a contemporaneous verbal modification, courts will allow extrinsic evidence to determine the true scope of the parties' agreement. This prevents a party from using the parol evidence rule as a shield to enforce a written proposal that, according to the other party, was never intended to be the entire deal.
