## Facts

- Hunt Foods and Industries, Inc. negotiated to acquire Eastern Can Company; the Doliner family controlled about 73% of Eastern Can’s stock.
- The parties generally agreed on price, but key deal terms (including the transaction form) remained unresolved, and negotiations paused for several weeks.
- Hunt sought protection against the Doliners using Hunt’s offer to solicit a higher third-party bid and demanded an option to purchase the Doliners’ shares.
- The parties executed a written option granting Hunt the right to buy the Doliner shares at $5.50 per share by notice on or before June 1, 1965; if timely exercised, closing would occur within seven days; Hunt paid $1,000 for the option.
- The Doliners asserted a contemporaneous oral condition: the option could be exercised only if the Doliners solicited an outside offer; Hunt denied any such limitation and treated the option as unconditional.
- After renewed negotiations failed to produce a definitive acquisition agreement, Hunt exercised the option within the stated period; the Doliners refused to tender the shares.
- Hunt sued for specific performance of the option.

## Issues

1. Whether the parol evidence rule under U.C.C. § 2-202 (as applied to securities transactions) bars evidence of an oral condition limiting when a written stock option may be exercised.
2. Whether summary judgment ordering specific performance was proper where the seller alleged a disputed oral condition precedent to the option’s effectiveness or exercise.

## Decision

- The appellate court reversed the grant of summary judgment for Hunt and denied summary judgment.
- The court held that the alleged oral condition was not barred as a matter of law by the U.C.C. parol evidence rule.
- The existence and effect of the alleged oral condition presented factual questions requiring trial rather than resolution on summary judgment.

## Legal Principles

- Under U.C.C. § 2-202, a final written expression cannot be contradicted by prior or contemporaneous oral agreements, but it may be explained or supplemented by consistent additional terms unless the writing was intended as a complete and exclusive statement.
- Evidence of a condition precedent to the legal effectiveness or permitted use of a writing may be admissible and is not automatically treated as an impermissible contradiction of the writing.
- Whether an asserted oral limitation is “consistent” with the writing, and whether the writing is fully integrated (complete and exclusive), may present fact questions that can preclude summary judgment.
- Summary judgment is improper when a contract defense rests on disputed facts and the parol evidence rule does not clearly foreclose proof of the alleged condition.

## Conclusion

The court held that, in a dispute over a written option to purchase stock, the U.C.C. parol evidence rule did not categorically bar proof of an alleged oral condition limiting the option’s exercise, and the resulting factual disputes required denial of summary judgment and further proceedings.


Hunt Foods & Indus., Inc. v. Doliner, 26 A.D.2d 41, 270 N.Y.S.2d 937 (N.Y. App. Div. 1st Dep’t 1966)