- -19
Petitioner argues in a memorandum filed prior to the briefs
in this case, but incorporated in petitioner's opening brief by
reference, that, in the alternative, the parties subsequently
modified the Nikki lease. Since the contract was not modified in
writing until Agent Siebert pointed out to Kurt Caillier that the
tire expenses were to be borne by the lessor under the contract,
which occurred subsequent to the taxable year at issue in this
case, petitioner argues that the parties modified the contract by
an executed oral agreement. Cal. Civ. Code sec. 1698 (West 1982)
states as follows:
(a) A contract in writing may be modified by a
contract in writing.
(b) A contract in writing may be modified by an
oral agreement to the extent that the oral agreement is
executed by the parties.
(c) Unless the contract otherwise expressly
provides, a contract in writing may be modified by an
oral agreement supported by new consideration. The
statute of frauds * * * is required to be satisfied if
the contract as modified is within its provisions.
While it is clear under California law that a written contract
may be modified either by a subsequent written contract or by an
executed oral contract, petitioner has offered no evidence
whatsoever of either an oral agreement or of any new
consideration. Kurt Caillier testified that until 1992 he was
unaware of the provision in the lease that Nikki's pay for tires
on the trucks leased to petitioner. This is contradictory to an
oral agreement modifying the provision.
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