Louisiana Looks at Four Corners

Article 2046 of the Louisiana Civil Code provides that “When the words of a contract are clear and explicit and lead to no absurd consequences, no further interpretation may be made in search of the parties’ intent.”  An inventor who claimed a residual interest in some patents he’d transferred found that the rule means exactly what it says, in a recent decision by the U.S. Court of Appeals for the Fifth Circuit.

It’s a complicated case with a variety of claims, but one of them was inventor Tommy Condrey’s claim that he had a right to reclaim patents he had assigned to Harrell Equipment Co., after Harrell’s assets were sold to a third party.  Condrey and a Harrell employee both submitted affidavits claiming that this was the “understanding” of the parties at the time the original agreement was made.  Trouble was, the agreement itself, though detailed, contained no such provision.  The magistrate judge refused to consider the evidence.

Louisiana law allows for certain exceptions to Article 2046, said the Fifth Circuit.  Parol evidence is admissible where it goes to the interpretation of ambiguous terms, or where the contract is incomplete, or where there is a claimed subsequent agreements.  None of those apply here, though.  The agreement is six pages long, carefully worded, and written very broadly.  It contains a clause providing that it is the entire agreement of the parties.  Since it’s fully integrated, parol evidence is inadmissible.

Condrey v. Suntrust Bank of Georgia, 2005 U.S. App. LEXIS 23721 (5th Cir. Nov. 1, 2005).

[Frank Snyder]