Scott v. Wall

Glenn and Gloria Wall (defendants) entered into a contract to purchase a restaurant from Lewis and Janet Scott (plaintiffs). The contract conditioned the purchase on the Walls’ ability to re-lease the restaurant’s current premises on acceptable terms for a three-year period. If the Walls were unable to secure a lease, under the contract terms, the Walls would be released from their promise to purchase the restaurant. But when the closing date arrived, the Walls had not been able to get a lease. Nevertheless, the Scotts wanted the sale to go through. Thus, the Scotts made an oral promise to the Walls: if the Walls signed the agreement and paid the $15,000 down payment, and the Walls ultimately could not get a lease, the Scotts would release the Walls from the contract and return the $15,000. The Walls agreed. The Walls then signed the purchase paperwork, paid the $15,000, and signed a $45,000 promissory note for the remainder of the purchase price. But the Walls never could get a lease. When the Walls defaulted on the promissory note, the Scotts sued the Walls to recover the amount promised. The Walls argued that, under the oral promise the Scotts had made, the Walls’ inability to obtain a lease voided the contract. The Scotts argued that the parol evidence rule barred any evidence that the contract was subject to an external condition, like the Scotts’ oral promise. The trial court agreed with the Scotts. The Walls appealed.