Pym v Campbell (1856) 6 E & B 370

Material Facts:

Pym and Campbell signed an agreement where Campbell agreed to purchase a portion of the profits that accrue from Pym’s invention. Campbell had a meeting with his engineers, and one of the engineers disapproved of Pym’s invention. Consequently, Campbell refused to proceed with the contract and Pym sued for breach of contract. Campbell contended that his agreement with Pym for the purchase was conditional on the approval of his engineers, and produced oral evidence to that effect.

Issues:

1. Whether or not evidence extrinsic to the written contract was admissible to alter the construction of the written agreement and render it unenforceable.

Holding:

1. That extrinsic evidence could be admitted to alter the construction of the written agreement and render it unenforceable.

Ratio Decidendi:

The court recognized the parole evidence rule but stated it would not apply in this case since the extrinsic evidence was not targeted at modifying the written agreement, but merely showing that the written agreement in its entirety was conditional on the approval of Campbell’s engineers. The court therefore concluded that the written agreement was not an agreement owing to the failure of the condition on which it was made.