## Facts

- Poultry growers in Minnesota and Iowa entered written production contracts with Herider Farms, Inc., a wholly owned subsidiary of Campbell Soup Company, to raise chicks supplied by Herider to processing weight.
- The contracts required the growers to build specialized poultry barns and set the compensation the growers would receive for finished chickens.
- Each contract contained an express at-will termination clause allowing either party to terminate for any reason when no chicks were in the barn and none were scheduled for placement.
- Written addenda reiterated the termination right and provided a specific remedy if Herider terminated before the grower had received 35 or 40 flocks: payment of the reasonable cost of financing barn construction.
- The growers alleged Herider made pre-contract oral promises that it would place chicks for the useful life of the barns, terminate only for cause, and that projected earnings would be achieved.
- In May 1997, Herider notified the growers that Campbell was closing its Worthington, Minnesota processing plant and that Herider would cease placing flocks, invoking the termination clause.
- The growers sued Herider and Campbell asserting breach of contract, fraudulent inducement/misrepresentation, breach of the implied covenant of good faith and fair dealing, rescission, and related theories.
- The district court excluded evidence of the alleged oral promises under the parol evidence rule, limited contract damages to the addenda’s financing-cost remedy, and disposed of the fraud-based and related claims; the growers appealed.

## Issues

1. Whether the production contracts and addenda unambiguously authorized at-will termination and therefore barred parol evidence of prior oral promises about duration and cause-only termination.
2. Whether the addenda limited the growers’ recovery for early termination to the reasonable cost of financing barn construction, precluding lost profits or other expectancy damages.
3. Whether fraud and misrepresentation claims based on pre-contract statements could proceed despite the written agreements, including whether reliance on contradictory oral assurances was reasonable.
4. Whether an implied covenant of good faith and fair dealing could restrict exercise of an express at-will termination right.

## Decision

- The Eighth Circuit affirmed the judgment for Herider and Campbell.
- It held the contracts and addenda unambiguously permitted termination without cause (subject to the no-chicks timing condition), so the district court properly excluded parol evidence of inconsistent oral promises.
- It enforced the addenda’s limited remedy for premature termination, restricting damages to the reasonable financing costs for barn construction when termination occurred before 35 or 40 flocks.
- It affirmed dismissal/summary judgment on fraudulent inducement and misrepresentation claims because reliance on oral assurances that directly conflicted with the integrated written terms was unreasonable as a matter of law, and profit projections were generally nonactionable.
- It rejected the good-faith claim because the implied covenant cannot negate an express contractual right to terminate at will.

## Legal Principles

- When a written contract is integrated and unambiguous, prior or contemporaneous oral statements that contradict the writing are inadmissible under the parol evidence rule.
- Courts enforce clear at-will termination provisions according to their terms; implied duties cannot be used to impose “for cause” limitations where the contract grants a termination right.
- Parties may contractually allocate risk through a specific limited-remedy clause; when the contract’s remedial scheme is clear, recovery may be confined to that remedy rather than broader expectancy damages.
- Fraud and misrepresentation claims fail where alleged oral promises contradict the plain language of an integrated agreement and the claimant’s reliance is unreasonable; forward-looking profit projections are typically treated as opinion absent proof of intentional deception tied to falsity of existing fact.

## Conclusion

The court enforced the growers’ written agreements as drafted, holding that unambiguous at-will termination and limited-remedy provisions controlled, parol evidence could not rewrite those terms, and tort theories could not supply additional recovery where reliance on contradictory oral assurances was legally unreasonable.


Crowell v. Campbell Soup Co., 264 F.3d 756 (8th Cir. 2001)