Facts
- A farmer-lessee leased approximately 52 acres of farmland from the lessors to grow wheat under a short, informal written agreement.
- The writing included a clause giving the lessors a right to “buy out” the lessee at the lessee’s cost per acre, capped at $70 per acre, for the stated purpose of developing a mobile home park.
- The writing set rent and the lease term but did not state how long the buy-out right could be exercised.
- The lessee planted a wheat crop. In early June 1975, before harvest, the lessors entered the property, took possession, and cut the wheat.
- The lessors claimed they were exercising the contractual buy-out right and offered to pay costs up to $70 per acre; the lessee claimed the wheat’s value was far higher and alleged trespass.
- The lessee asserted an additional oral agreement limiting the buy-out right to roughly 30–60 days after the lease was signed.
Issues
- Whether the parol evidence rule barred evidence of an oral agreement limiting the duration of the lessors’ buy-out right when the written lease was silent on duration.
- Whether the lease was a complete integration on the buy-out term such that supplementary oral terms were excluded.
- Whether an oral 30–60 day time limit was “inconsistent” with the written buy-out clause.
Decision
- The Oregon Supreme Court affirmed the judgment for the lessee.
- The court held the writing was not a complete integration of the parties’ agreement as to the duration of the buy-out right.
- The court held the oral time-limit term was not inconsistent with the writing because the writing contained no duration provision for the buy-out right.
- The trial court therefore did not err in admitting the parol evidence, and the jury could credit the oral agreement in finding the lessors’ entry unauthorized.
Legal Principles
- The parol evidence rule excludes prior or contemporaneous oral terms only to the extent the parties intended the writing to be the final and complete expression of the terms at issue.
- A brief, informal writing and the transaction’s circumstances may support a finding of partial, not complete, integration.
- Where a writing is silent on a term, a supplementary oral term may be admitted if it does not contradict an express written provision.
- Courts may consider the practical and commercial consequences of competing readings when deciding whether a writing was intended to be complete on a disputed point.
- Once admissible, the existence and content of the alleged oral agreement are factual questions for the trier of fact.
Conclusion
Because the lease did not specify any time period for exercising the buy-out right and the writing appeared incomplete, the court permitted parol evidence of an oral 30–60 day limitation as a consistent supplementary term, leaving the jury’s verdict for the lessee intact.