A jeweler and a goldsmith signed a written agreement: For $3,000, the goldsmith shall sell to the jeweler a size six gold ring setting that the jeweler shall select from only the goldsmith's white gold ring designs. The agreement did not address other terms. The jeweler claims the goldsmith orally agreed to broaden choices to rose gold designs and to include $1,000 in earrings as an incentive. The goldsmith refused. If the jeweler sues, what evidence should the court admit?

• A. The earring settings but not the rose gold option.
• B. The rose gold option but not the earring settings.
• C. Both the earring settings and the rose gold option.
• D. Neither.

Answer: (A)

Under the UCC, a written contract for the sale of goods can be supplemented by consistent, additional terms only if those terms do not modify the contract’s core scope, and modifications to a contract priced over $500 must be in writing to be enforceable. The written agreement says the jeweler will buy a size six white-gold ring setting chosen from the goldsmith’s white-gold designs for $3,000. A claim that the parties orally broadened the option to include rose gold would add a new design category and effectively modify the scope of the contract. Because that modification would bring the agreement within the Statute of Frauds, it cannot be enforced or admitted without a written modification.

By contrast, the offer to include $1,000 in earrings as an incentive is a collateral term that does not contradict the written terms. Under the parol evidence rule’s exceptions, such collateral agreements may be admitted to explain or supplement the contract, provided they do not conflict with the written terms. Since this incentive does not alter the core obligation to purchase white-gold ring settings, it can be admitted as evidence of a separate agreement or consideration.

So evidence of the earring incentive should be admitted, while the rose-gold modification should be excluded.