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Zell v. American Seating Co. | 138 F.2d 641 (1943)
Ideally, a written contract should accurately memorialize all key terms to an agreement between contracting parties. But in Zell versus American Seating Company, we explore what happens if parties say one thing, but put something else in writing.
On October seventeenth, nineteen forty-one, Zell sent American Seating a letter offering his services to procure government contracts on American’s behalf in exchange for one thousand dollars a month plus a commission of between three and eight percent on contracts secured. On October thirty-first, Zell and American’s president met and orally agreed to those terms. But later that day, they executed a written contract stating that Zell would receive one thousand dollars a month as his full compensation. When executing the written agreement, however, the parties orally agreed that the original oral agreement was the real contract, and that the written agreement omitted reference to commissions to avoid the stigma Congress associated with such arrangements.
Over nine months, Zell secured multiple contracts for American with a combined value of almost six million dollars. American paid Zell one thousand dollars per month and offered a small bonus but refused to pay him any commissions.
Zell sued American, arguing that American was required to pay the commissions. American moved for summary judgment, arguing that the parties’ written agreement didn’t entitle Zell to commissions, and because that agreement was complete and unambiguous, the court couldn’t consider parol evidence, or evidence from outside the written agreement, to determine contractual obligations.
The district court granted summary judgment in American’s favor, and Zell appealed to the Second Circuit.
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