247 N.Y. 377
Defendant sellers appealed a decision by which the Appellate Division of the Supreme Court in the Second Judicial Department (New York) required them to specifically perform under an oral agreement with plaintiff buyer. The sellers asserted that the parol evidence barred enforcement of the oral agreement to remove a structure from property sold to the buyer.
-Plaintiff buyer negotiated with defendant sellers to purchase a farm. As a condition to this purchase, defendants agreed to remove an icehouse encumbering the land.
-The purchase agreement was reduced to writing, yet the oral agreement concerning the removal of the icehouse was ignored.
-Litigation ensued in which plaintiff attempted to compel performance on the part of defendants. The trial court required specific performance of the oral agreement and the appellate court affirmed this decision.
-The court reversed, holding that the presence of a written agreement clearly invoked the parol evidence rule striking the outside oral agreement.
-The court also held that, although the oral agreement was collateral in nature, it could have been readily inserted into the more dominating written form. Accordingly, defendant was not required to remove the icehouse.
an oral agreement is permitted to vary a written contract only if it is collateral in form, does not contradict express or implied conditions of the written contract, and consists of terms which the parties could not reasonably have been expected to include in the written contract.
- The parol evidence rule is more than a rule of evidence and oral testimony, even if admitted, will not control the written contract unless admitted without objection
- The parol evidence rule applies to attempts to modify such a contract by parol. It does not affect a parol collateral contract distinct from and independent of the written agreement.
- Two entirely distinct contracts, each for a separate consideration, may be made at the same time and will be distinct legally. Where, however, one agreement is entered into wholly or partly in consideration of the simultaneous agreement to enter into another, the transactions are necessarily bound together. Then, if one of the agreements is oral and the other is written, the problem arises whether the bond is sufficiently close to prevent proof of the oral agreement.
- Before an oral agreement is received to vary a written contract at least three conditions must exist: (1) the agreement must in form be a collateral one; (2) it must not contradict express or implied provisions of the written contract; and (3) it must be one that parties would not ordinarily be expected to embody in the writing. Or, put in another way, an inspection of the written contract, read in the light of surrounding circumstances, must not indicate that the writing appears to contain the engagements of the parties, and to define the object and measure the extent of such engagement. Or again, it must not be so clearly connected with the principal transaction as to be part and parcel of it.
The Court of Appeals reversed the appellate court on the grounds that plaintiff was not entitled to performance of an oral agreement where the existence of a written contract effectively waived such provisions pursuant to the parole evidence rule.
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