A familiar and eminently sensible proposition of law is that, when parties set down their agreement in a clear, complete document, their writing should as a rule be enforced according to its terms. Evidence outside the four corners of the document as to what was really intended but unstated or misstated is generally inadmissible to add to or vary the writing.
Plaintiff buyer filed an action for specific performance of a contract against defendant sellers. During contract negotiations, plaintiff learned that a lis pendens had been filed against the real property involved and therefore asked that a clause be added stating that if the litigation was unresolved as of June 1, 1987, either party could cancel the contract. When the date arrived with the litigation still pending, however, plaintiff indicated that it was prepared to close, but defendant cancelled the contract and invoked the cancellation clause. The trial court found the clause was unambiguous. The appellate court reversed the trial court's order granting summary judgment to plaintiff after considering extrinsic evidence regarding the history of a clause allowing either party to cancel the contract. The plaintiff appealed. The court reversed the lower court's decision. It granted plaintiff’s motion for summary judgment.
Should an unambiguous reciprocal cancellation provision in an action for specific performance of a contract to sell real property be read in the light of extrinsic evidence, as a contingency clause for the sole benefit of purchaser, subject to its unilateral waiver?
Here, the contract, read as a whole to determine its purpose and intent, plainly manifested the intention that defendant sellers, as well as plaintiff buyer, should have the right to cancel pursuant to the subject provision. All prior understandings must be merged into the contract, which expressed the parties' full agreement. Moreover, the face of the contract revealed a logical reason for the explicit provision that the cancellation right should run to defendants as well as to plaintiff. Extrinsic evidence should not be considered in order to create an ambiguity in the agreement which was complete and clear on its face.