## Facts

- On October 17, 1941, Zell wrote to American Seating Company offering to help American obtain national-defense contracts.
- Zell proposed compensation consisting of a monthly fee plus a bonus measured by the price of any defense contracts he secured for American.
- Zell later discussed the proposal with American’s president and, according to Zell, orally confirmed the same payment terms, including the bonus arrangement.
- On October 31, 1941, Zell and American executed a written agreement that reflected the monthly payment arrangement but omitted the bonus provision.
- Zell claimed American told him the bonus term could not be included in the writing, but assured him that the earlier oral understanding (including the bonus) remained the real agreement between them.
- Zell then performed services and obtained defense contracts for American.
- After receiving the benefit of those contracts, American refused to pay Zell any bonus.
- Zell sued for breach of contract. The trial court granted American’s motion for summary judgment on the ground that Zell’s letter and the oral conversation were inadmissible as parol evidence contradicting or adding to the written agreement.
- Zell appealed.

## Issues

1. Whether the parol evidence rule barred Zell from offering evidence of the earlier letter and oral agreement to prove a bonus term when the later written contract omitted any bonus provision.
2. Whether summary judgment was improper because Zell’s proof created a genuine dispute over whether the signed writing was intended to be a complete and final statement of the parties’ agreement.

## Decision

- The court of appeals reversed the summary judgment for American.
- The court held that Zell’s evidence, if believed, could support a finding that the signed writing was not intended to be the complete and exclusive memorial of the parties’ agreement because both sides allegedly understood that a material term (the bonus) was intentionally omitted.
- Because that dispute went to a material point (whether the parol evidence rule applied at all), the case could not be disposed of on summary judgment.
- The case was remanded for further proceedings.

## Legal Principles

- The parol evidence rule applies only when the parties intended their writing to be a final and complete integration of their agreement.
- A party may offer extrinsic evidence to show that a writing was not intended as the full and accurate statement of the parties’ bargain, including that it was executed with the understanding that a material term was omitted.
- When admissibility turns on a contested factual question—such as whether the parties meant the writing to be complete—summary judgment is inappropriate if the nonmovant’s evidence would allow a reasonable factfinder to rule in its favor.

## Conclusion

Zell v. American Seating Co. holds that the parol evidence rule does not justify summary judgment where the plaintiff offers evidence that, despite a signed writing, the parties did not intend the document to be the complete and final contract and instead understood that a bonus term was part of their real agreement but was omitted from the writing; the resulting factual dispute required a trial rather than dismissal.


Zell v. American Seating Co., 138 F.2d 641 (1943)