Peterson v. The Sunrider Corp.

When will parole evidence be admitted to determine the intent of a contract?


The Utah Supreme Court held that parole evidence is to be admitted only when the intent of the parties is not clear from the face of the agreement. In the original contract between Peterson and Sunrider, several terms were left undefined, such as the extent of the Director level requirements from which Peterson was exempt. The Court held that the intent of the parties was not clear on the face of the contract, but intent was evidenced by 18 years of unobjectionable conduct under the agreement. Because the contract was ambiguous, and extrinsic evidence existing that tended to support Peterson's interpretation, summary judgment was improperly granted. Further, the court held that dismissal of the contract claim as violating the state's anti-pyramid law was not appropriate. The purchase of a distributorship, the basic transaction between Peterson and Sunrider, is not the same as receiving compensation solely for recruitment, an activity that would violate the state anti-pyramid statute.

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