1. Did the parties have a fully integrated written contract concerning the loan of $80,000 and the promissory note?

2. Can a contemporaneous oral agreement that “it was understood and agreed that a substantial part of the note would be paid for by services rendered by the defendants” be given weight as evidence to contradict the 1990 written settlement agreement and note that called for annual cash payments to repay the $80,000 loan?

3. Must a subsequent oral modification to a written agreement meet the essential elements for contract formation, including an agreement, and consideration?

On April 2, 1990, Christian Bourg hired Bristol Boat Co., Inc., and Bristol Marine Co. (defendants) to construct and deliver a yacht on July 1, 1990. However, the defendants did not live up to their promises and the contract was breached. On October 22, 1990, the defendants executed a written settlement agreement whereby Bourg agreed to pay an additional sum of $135,000 for the delivery of the yacht and to provide the defendants a loan of $80,000 to complete the construction of the vessel. Referencing the settlement agreement, the defendants at the same time executed a promissory note obliging them to repay the $80,000 loan plus interest in annual installments due on November 1 of each year, with the final payment due on November 1, 1994. The court stated in presenting the facts: “However, like the yacht itself, the settlement agreement soon proved to be just another hole in the water into which the plaintiff threw his money.” Bourg sued the defendants after they failed to make certain payments on the note, and the court granted a motion for summary judgment in favor of Bourg for $59,081. The defendants appealed.

The defendants asserted that the trial court was in error because “at the time of the execution of the promissory note and settlement agreement upon which Plaintiff relies, it was understood and agreed that a substantial part of the note would be paid for by services rendered by the defendants….”

JUDICIAL OPINION

FLANDERS, J.… [T]he statement in defendants’ affidavit that the alleged oral modification was agreed to “[at] the time of the execution of the promissory note and settlement agreement” (emphasis added) eviscierates defendants’ contention on appeal that it was in fact a subsequent oral modification. Rather, because the affidavit recites that the alleged oral side agreement was entered into at the time of the settlement ………………………