## Facts

- Mayol (plaintiff) agreed to buy real estate from Somers (defendant/seller) using a written contract to purchase.
- Weiner Companies, Ltd. (defendant) acted as Somers’s sales agent and held Mayol’s $1,000 earnest-money deposit in escrow.
- The contract stated that possession would be delivered by a specified date “subject to tenant’s rights.”
- The contract also required Somers to furnish evidence of merchantable title and to convey by warranty deed subject only to specified encumbrances.
- After signing the contract, Mayol received a copy of the tenant’s existing lease and learned for the first time that the tenant had an option to purchase the property.
- Mayol refused to close, demanded return of the $1,000 escrow deposit, and sued to recover it.
- Because the “subject to tenant’s rights” language was treated as ambiguous, the trial court admitted extrinsic evidence on the parties’ intent and found that Mayol had agreed to take the property subject to all tenant rights in the lease, including the purchase option.
- The trial court concluded Mayol breached the contract by refusing to close and awarded the $1,000 to Somers as damages.
- Mayol appealed.

## Issues

1. Whether the trial court’s finding that “subject to tenant’s rights” included the tenant’s option to purchase (making Mayol’s refusal to close a breach) was against the manifest weight of the evidence.

## Decision

- The appellate court reversed and remanded.
- The court accepted the premise that the relevant contract language was ambiguous and that extrinsic evidence could be considered to determine intent.
- Because the trial court resolved the ambiguity by weighing extrinsic evidence, the appellate court treated the interpretation as a factual determination and reviewed it under the manifest-weight-of-the-evidence standard.
- The appellate court held the trial court’s finding—that Mayol agreed to buy subject to the tenant’s purchase option—was against the manifest weight of the evidence.
- As a result, the award of the $1,000 escrow deposit to Somers as damages for Mayol’s breach could not stand, and further proceedings were required on remand.

## Legal Principles

- When contract language is ambiguous and the court relies on extrinsic evidence to determine the parties’ intent, the resulting interpretation is a factual finding reviewed for manifest weight of the evidence.
- A general provision that possession is “subject to tenant’s rights” may reasonably refer to a tenant’s possessory and use rights under an existing lease; without proof of mutual intent, it does not automatically include a tenant’s separate, title-affecting right such as an option to purchase.
- Contract terms requiring merchantable title and a warranty deed subject only to stated encumbrances weigh against reading an undisclosed tenant purchase option into a general “tenant’s rights” clause absent clear evidence that the buyer agreed to accept that limitation.

## Conclusion

Mayol v. Weiner Companies, Ltd. holds that, where a real-estate contract’s “subject to tenant’s rights” language is treated as ambiguous and intent is determined from extrinsic evidence, the trial court’s interpretation will stand only if supported by the evidence; here, the evidence did not support a finding that Mayol agreed to take the property subject to an undisclosed tenant option to purchase, so the appellate court reversed the escrow award to the seller and remanded for further proceedings.


Mayol v. Weiner Companies, Ltd., 425 N.E.2d 45 (1981)