Hallowell v. American Honda Motor Co., Inc.

A-5535-97T3 (N.J. Super. App. Div. 1999) (Unpublished)
  • Opinion Date: June 15, 1999

CONTRACTS; ORAL MODIFICATION—An unambiguous contract provision in a contract that requires modifications and waivers to be in writing bars an oral modification by a party’s representative.

An application for a new car dealership was “tentatively approved” and a letter of intent was issued. The letter of intent stated that the required dealership facility was to be completed by a given date and that if any conditions outlined in the letter of intent remained unsatisfied by that date, the agreement would be deemed automatically canceled. The dealership did not complete its construction by the given date, but, instead, applied for a six month extension of the construction deadline to comply with local and state regulations. The manufacturer responded affirmatively, and a letter of agreement was executed extending the deadline by six months. The dealership did not comply with the extended deadline, whereupon the dealership agreement was terminated. The dealership contended that the original letter of intent did not expire because it had been promised by an employee of the manufacturer that time for compliance was extended indefinitely. The Court rejected that argument because nothing appeared to have given authority to the manufacturer’s field representative to extend or waive any condition. Moreover, the single extension granted by the manufacturer was in writing and signed by the parties. Furthermore, the dealership’s contention of an oral modification by the manufacturer’s employee conflicted with the parole evidence rule and the statute of frauds. Consequently, the Appellate Division upheld the summary judgment in favor of the manufacturer on the basis that the letter of intent was a fully integrated contract with unambiguous terms.