## Facts

- Thompson owned pine logs marked “H. C. A.” cut in the winters of 1882 and 1883 and located on or along the Mississippi River above Minneapolis.
- Through Thompson’s agent, the parties executed a short written agreement (June 1, 1883) selling all such logs to Libby for \$10 per thousand feet, boom scale at Minneapolis, with cash payment as scale-bills were produced.
- The writing specified the subject matter, price, and payment terms, but contained no quality term or warranty.
- After delivery, Libby refused to pay the full contract price, asserting that Thompson’s agent made a contemporaneous oral warranty of quality that was breached.
- Thompson sued for the contract price; Libby defended based on breach of the alleged warranty.
- Over Thompson’s objection, the trial court admitted oral testimony of the alleged warranty and denied Thompson a new trial after an adverse verdict.
- Thompson appealed from the order refusing a new trial, challenging admission of the parol warranty evidence.

## Issues

1. Whether the written agreement was, on its face, a complete and final expression of the parties’ contract for the sale of the logs.
2. If so, whether parol evidence of a contemporaneous oral warranty of quality was admissible as a collateral agreement, or barred by the parol evidence rule.

## Decision

- The court held the writing imported a complete legal obligation and was a complete integration of the sale agreement.
- The court held a warranty of quality in a sale of personal property is a term of the sale contract, not a separate collateral agreement.
- Because the alleged warranty concerned the same subject as the writing (the sale of the logs), parol evidence could not be used to add that term to the integrated writing.
- The court ruled the trial court erred in admitting the oral warranty evidence and reversed the order denying a new trial.

## Legal Principles

- The completeness of a written contract as a full expression of the parties’ agreement is determined from the writing itself; if it appears complete on its face, it is conclusively treated as containing all material terms.
- When a writing facially expresses a complete agreement, parol evidence is inadmissible to add an additional term even if the writing is silent on that point.
- Parol evidence of a collateral agreement is admissible only if it relates to a subject distinct from the subject addressed in the writing.
- In a sale of personal property, an asserted warranty of quality is not a distinct collateral contract but an item or term of the contract of sale, and therefore must be included in an integrated writing to be enforceable as part of the contract.

## Conclusion

The court applied a strict parol evidence rule: because the written log-sale agreement appeared complete on its face, the buyer could not introduce contemporaneous oral warranty terms to change the parties’ obligations, and a new trial was required after the erroneous admission of such evidence.


Thompson v. Libby, 34 Minn. 374, 26 N.W. 1 (Minn. 1885)