Parol testimony is admissible to prove a condition precedent to the legal effectiveness of a written agreement if the condition does not contradict the express terms of such written agreement. A certain disparity is inevitable, whenever a written promise is, by oral agreement of the parties, made conditional upon an event not expressed in the writing. Quite obviously, though, the parol evidence rule does not bar proof of every orally established condition precedent, but only of those which in a real sense contradict the terms of the written agreement.
Appellant and respondents executed a written agreement to merge their various corporate interests. Alleging a breach of contract, appellant brought suit for specific performance and for an accounting. Respondents urged that the written agreement was executed "upon a parol condition" that it "was not to operate" as a contract until funds were first procured. The trial court admitted the evidence, over appellant's objection, found that the oral condition asserted had actually been agreed upon by the parties, and rendered judgment in favor of respondents.
Should the oral evidence be admitted as evidence?
The court held that evidence of an oral condition should not have been excluded as inconsistent merely because the written agreement contained other conditions precedent.