Question

Riverisland Cold Storage, Inc. v. Fresno-Madera Prod. Ass'n

1. How did this ruling impact California in regards to the parol evidence rule?

Answer 1

Summary: “Riverisland Cold Storage v. Fresno-Madera Production Credit Ass'n”

The plaintiff in Riverisland, the workman’s sued their credit union for fraud and negligent misrepresentation in connect with a renegotiated loan. They claimed a loan officer told them that if they pledged tow additional properties in addition to existing collateral. The loan would be extended by two years. This was not in line with the written renegotiated agreement which stated three months of forbearance and provided for line in eight parcels of real property. The workman’s signed the agreement which was integrated and also initialed many pages of the contract. They later argued that they never read the agreement.

Holding: The court in Riverisland allowed the workman to introduce evidence of oral representation made by the loan officer as a claim of loan fraud. This ruling overturned longstanding precedent in California that prohibited submitting parole evidence (evidence that contradicts or adds to the written integrated agreement). The evidence admitted was directly contradicting the written agreement.

Riverisland caused anxiety to financial institutions and other business houses in California. It Overturns prior California case law that prevented the use of parol evidence to contradict the terms of the written contract.