## Facts

- Gold Seal Productions, controlled by producer Jack H. Skirball and others, previously made multiple films under written production-and-distribution contracts with RKO.
- In prior dealings, Skirball negotiated production arrangements primarily with RKO’s executive producer, Sidney Rogell, while RKO’s legal department later prepared written contracts for signature by another corporate officer.
- Gold Seal alleged that Rogell, for RKO, entered into an oral agreement for Gold Seal to produce a motion picture based on the novel *Appointment in Samarra*, with RKO to finance and distribute the film.
- Gold Seal’s evidence was that the parties agreed on the essential business terms and adopted the parties’ prior written “Payment on Demand” agreement to supply remaining terms not separately negotiated.
- A key time constraint was RKO’s effort to secure actor Gregory Peck; Gold Seal’s evidence was that the parties considered the deal binding regardless of whether Peck ultimately starred.
- Skirball and Rogell allegedly confirmed assent by handshake and words indicating a completed deal, and RKO’s legal department began drafting a written contract to memorialize the agreement.
- The parties allegedly verbally approved a later draft as reflecting the prior oral deal; shortly thereafter, Peck declined to appear, and RKO refused to proceed and later asserted the deal no longer existed.
- Gold Seal sued for breach of the oral contract; the trial court found a binding oral contract, found RKO liable, and awarded Gold Seal $397,486.55 in damages.

## Issues

1. Whether substantial evidence supported the trial court’s finding that the parties formed an enforceable oral contract despite contemplating a later written instrument and incorporating terms by reference to a prior contract.
2. Whether Rogell had actual or apparent authority to bind RKO to the alleged oral production-and-financing agreement.
3. Whether the statute of frauds rendered the alleged oral agreement unenforceable.
4. Whether evidentiary rulings and the measure of damages required reversal.

## Decision

- The Court of Appeal affirmed the judgment for Gold Seal.
- Substantial evidence supported a finding of a present, binding oral contract, with the contemplated writing treated as a later memorial rather than a condition to contract formation.
- The evidence supported that Rogell had at least apparent authority to bind RKO, given his role and customary practice in negotiating and making commitments on the studio’s production side.
- The statute of frauds did not bar enforcement on this record.
- The challenged evidentiary rulings did not warrant reversal, and the damages award of $397,486.55 was sufficiently supported.

## Legal Principles

- A binding contract may be formed orally when parties agree on essential terms and objectively manifest intent to be bound, even if they plan to execute a later written document.
- Parties may incorporate non-negotiated terms into an oral agreement by reference to an existing written contract between them, if the reference provides a definite standard for the omitted terms.
- Apparent authority may be found where a corporation places an agent in a position that customarily carries power to make the type of commitment at issue, and the counterparty reasonably relies on the agent’s manifestations and course of dealing.
- The statute of frauds does not defeat enforcement where the agreement is not shown to be incapable of performance within one year or where the asserted statutory bar is not established on the record.
- On appeal from a judgment after trial, contract formation, authority, and damages determinations are sustained if supported by substantial evidence, and evidentiary error warrants reversal only if prejudicial.

## Conclusion

The court upheld liability and damages for breach of an oral film-production agreement, concluding there was substantial evidence of mutual assent to essential terms, incorporation of remaining terms by reference to a prior written contract, and apparent authority in the studio executive who negotiated the deal, with no statute-of-frauds or evidentiary basis for reversal.


Gold Seal Prods., Inc. v. RKO Radio Pictures, Inc., 134 Cal. App. 2d 843, 286 P.2d 954 (Cal. Ct. App. 1955)