Gold Kist, Inc. v. Carr

Supreme Court of Texas · Contracts

Contractsunambiguous contractno obligation clauseexclusive hauling rightsoral promisecollateral agreementone-year provisionwriting requirement

Facts

Gold Kist and Carr executed a written agreement under which Carr bought trucks and hauling equipment and signed a five-year promissory note. The written contract stated that Gold Kist, from time to time, might, but was under no obligation to, engage Carr to haul commodities on its behalf. Carr nevertheless claimed that, after earlier negotiations, Gold Kist promised him exclusive hauling rights for Gold Kist's peanuts in Texas during the term of the note. The jury found such a promise, found damages for several peanut-hauling seasons, and found that Gold Kist knew the representation was false when made.

Issue

Whether Carr could enforce or recover on an alleged oral promise of exclusive hauling rights despite a written contract stating Gold Kist had no obligation to use him, and despite the statute of frauds. Also, whether the trial court could supply promissory estoppel findings and whether fraud could be based on breach of that unenforceable promise.

Rule

Parol evidence may not be used to contradict, vary, or add to an unambiguous written agreement absent fraud, accident, or mistake. An agreement not performable within one year falls within the statute of frauds and must be evidenced by a writing containing all essential terms, signed by the party to be charged or an authorized signer. A purported collateral agreement is not enforceable if it concerns the same subject matter and contradicts the written contract. Promissory estoppel requires a promise, foreseeability of reliance, and substantial detrimental reliance, and in such a claim only reliance damages are available; omitted findings cannot be supplied under Rule 279 unless the submitted issue is necessarily referable to that theory. A party may not recover in fraud for breach of an unenforceable promise when the gist of the claim is the benefit of that unenforceable agreement.

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One of 10 multiple-choice questions for this case. Pick an answer to see why.

In Tulsa, Nora Bennett signed a written service agreement with Red Mesa Grain Logistics, a fictional company. The agreement stated that Red Mesa "may, but is under no obligation to, assign any transport work" to Nora. Nora later sued, alleging the plant manager had orally promised she alone would handle all wheat deliveries from western Oklahoma for the next two harvest seasons.

If Nora offers the oral promise to prove breach of contract, what is the strongest argument against enforcement?

Explanation. The majority held that where a writing unambiguously states the company is under no obligation to use the other party, parol evidence cannot be used to add or contradict an exclusive-rights promise on the same subject. A mere disagreement about meaning does not create ambiguity. (Derived from Gold Kist, Inc. v. Carr (n.d.).)