## Facts

- Harold S. Lee and his sons (the Lees) owned a 50% interest in a Washington, D.C. wholesale liquor distributorship; other family members owned the remaining 50%.
- A large share of the distributorship’s sales came from Seagram brands, and Harold had a decades-long business relationship with Seagram, including senior roles within the Seagram organization.
- When the business was to be sold, Harold negotiated with a Seagram executive and alleged he conditioned the Lees’ agreement to sell on Seagram’s oral promise to “relocate” Harold and his sons into a new distributorship in a different city.
- The asset sale closed under a written purchase agreement that did not include the alleged relocation promise and did not contain a merger/integration clause.
- The Lees transferred their interests as contemplated by the sale; Seagram did not provide the alleged new distributorship despite claimed opportunities to do so.
- The Lees sued for breach of the alleged oral agreement; after trial, a jury awarded damages to the Lees, and the district court denied Seagram’s post-verdict motion for judgment as a matter of law.

## Issues

1. Whether the parol evidence rule barred proof of a contemporaneous oral promise to relocate the Lees because the written asset purchase agreement was a complete integration.
2. Whether the evidence was sufficient to support the jury’s findings that an enforceable oral contract existed, Seagram breached it, and damages were proven.

## Decision

- The court affirmed the judgment for the Lees.
- The court held that the parol evidence rule did not bar evidence of the oral relocation promise because the writing was not necessarily a complete integration and the oral promise could be found collateral and non-contradictory.
- The court held that sufficient evidence supported the jury’s findings on formation, breach, and damages, and the district court properly denied judgment notwithstanding the verdict.

## Legal Principles

- The parol evidence rule bars prior or contemporaneous terms only when the parties intended the writing to be the complete and accurate statement of their agreement.
- Evidence of a contemporaneous oral agreement may be admitted when the oral agreement is collateral to the writing, does not contradict the written terms, and is not the type of term the parties would ordinarily be expected to include in the writing.
- Whether a writing is a complete integration may be a fact question informed by context, including the absence of a merger clause, the identities of the promise’s beneficiaries, and whether the alleged oral term concerns a separate subject from the written transaction.
- A jury verdict on an oral contract claim will be sustained where the record permits a reasonable finding of mutual assent, breach, and a supported damages measure.

## Conclusion

The court upheld a jury verdict enforcing an oral promise associated with a corporate asset sale, holding that the parol evidence rule did not bar proof of a collateral, non-contradictory agreement where the writing was not shown to be a complete integration and the trial evidence supported contract formation, breach, and damages.


Lee v. Joseph E. Seagram & Sons, Inc., 552 F.2d 447 (2d Cir. 1977)