W.W.W. Associates, Inc. v. Giancontieri, 77 N.Y.2d 157 (1990)

When a contract is clear and unambiguous on its face, parol evidence is inadmissible to contradict or vary its terms.

Summary

W.W.W. Associates sued the Giancontieris, alleging breach of a contract for the sale of land. The contract contained a clause allowing the purchasers to cancel if they were unable to obtain necessary approvals. The purchasers canceled, claiming inability to obtain approvals, while the seller alleged the cancellation was improper. The Court of Appeals held that because the contract was unambiguous, parol evidence was inadmissible to interpret the cancellation clause. The court affirmed the grant of summary judgment to the defendants because the contract language was clear.

Facts

W.W.W. Associates, Inc. (seller) entered into a contract to sell land to the Giancontieris (purchasers). The contract included a clause allowing the purchasers to cancel the contract if they were unable to obtain the necessary subdivision approvals. The purchasers canceled the contract, asserting they could not obtain the required approvals. The seller sued, claiming the purchasers’ cancellation was a breach of contract. The seller argued that the cancellation clause was intended to allow cancellation only if governmental agencies denied the approvals, not if the purchasers simply chose not to pursue them vigorously.

Procedural History

The Supreme Court granted summary judgment to the purchasers (Giancontieris), dismissing the complaint. The Appellate Division affirmed. The New York Court of Appeals granted leave to appeal and affirmed the Appellate Division’s order.

Issue(s)

Whether parol evidence is admissible to interpret a contract’s cancellation clause when the clause is unambiguous on its face.

Holding

No, because parol evidence is inadmissible if a contract is clear on its face and sufficient alone to divine the intent of the parties.

Court’s Reasoning

The Court of Appeals reasoned that the bonus clause unambiguously vests discretion regarding the amount of bonus compensation to be awarded in defendants’ management. The court emphasized the importance of adhering to the plain meaning of contract language, stating that “[e]xtrinsic evidence is not admissible to create an ambiguity in a written agreement which is complete and clear and unambiguous upon its face.” The court rejected the seller’s argument that the cancellation clause should be interpreted to require a denial of approvals by governmental agencies, finding no such limitation in the contract’s language. The court observed that the parties could have included such a limitation, but they did not. The court quoted Chimart Assocs. v Paul, 66 NY2d 570, 571 stating, “a written agreement between sophisticated, counseled businessmen is unambiguous on its face,” plaintiff “cannot defeat summary judgment by a conclusory assertion that * * * the writing did not express his own understanding of the oral agreement reached during negotiations.”