Zell v. American Seating Co.

Zell (plaintiff) wrote to American Seating (defendant) offering to help it obtain defense contracts, with pay to be a monthly fee plus a bonus tied to any contract price; he orally confirmed these terms with American's president. When they signed a written agreement on October 31, 1941, it recited the discussed terms but omitted the bonus provision. American said it could not put the bonus in writing but assured Zell the earlier conversation remained the real deal. After Zell landed defense contracts, American refused to pay any bonus. Zell sued for breach; the trial court granted American summary judgment, ruling the letter and oral conversation were inadmissible parol evidence. Zell appealed.

Whether parol evidence is admissible to prove the parties' true agreement where the signed writing was designed by the parties as a mere sham rather than as a genuine statement of their contract.