Mitchill v. Lath

New York Court of Appeals · 1928 · Contracts

Contractsparol evidence ruleintegrationoral agreementCardozoparol evidencecollateral agreementintegration

Facts

The defendants owned a farm they wished to sell, and across the road on adjoining land they had an ice house they might remove. Mrs. Mitchill found the ice house objectionable, and the defendants allegedly orally promised that, in consideration of her purchase of the farm, they would remove it in the spring of 1924. Relying on that promise, she entered into a detailed written contract to buy the farm for $8,400 and later received a deed and took possession. The defendants did not remove the ice house, and the question became whether the oral promise could be enforced despite the written contract.

Issue

May a buyer enforce an oral promise made as an inducement to a written land-sale contract when the written agreement appears complete and the oral promise concerns removal of an objectionable structure related to the property transaction? More specifically, is the alleged promise provable as a collateral agreement outside the parol evidence rule?

Rule

Under New York decisions, an oral agreement may be received alongside a written contract only if at least three conditions exist: (1) the agreement is in form collateral; (2) it does not contradict express or implied provisions of the writing; and (3) it is one that parties would not ordinarily be expected to embody in the writing. Stated another way, if the writing, read in light of surrounding circumstances, appears to contain the parties' engagements and define the object and extent of those engagements, or if the oral term is so clearly connected with the principal transaction as to be part and parcel of it, the oral term may not be proved.

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One of 10 multiple-choice questions for this case. Pick an answer to see why.

In Asheville, North Carolina, Dana Mercer agreed in a detailed written contract to buy a hillside home from Nolan Reed. Before signing, Nolan orally promised that after closing he would remove a rusted billboard standing on neighboring land he owned across the road because Dana said it ruined the view; the writing contains numerous sale terms but says nothing about the billboard.

If Dana sues to enforce the oral promise, which is the strongest argument against admission of the oral term?

Explanation. Under the majority rule, an oral agreement may be proved only if it is collateral in form, does not contradict the writing, and is not a term parties would ordinarily expect to embody in the writing. Substance controls over form. A seller's promise to remove an objectionable structure affecting the desirability of the purchased property is closely tied to the sale and would naturally be included in a detailed land-sale contract, so parol proof is barred.