## Facts

- John Pym invented a “crushing, washing and amalgamating machine” and negotiated to sell fractional interests in its benefits.
- The defendants signed a written memorandum stating purchase terms for specified shares for an aggregate price of £800 and referencing an additional payment to a third party.
- Pym also signed a separate memorandum promising, for £5, to execute legal documents within two days to complete the defendants’ titles to the stated interests.
- The defendants introduced oral evidence that, before signing, the parties agreed the writing would not operate as a binding bargain unless a specified engineer approved the invention after inspection.
- The engineer did not approve, and the defendants refused to proceed with the purchase or payment.
- Pym sued for breach, asserting the signed writings constituted a concluded contract.

## Issues

1. Whether parol evidence was admissible to prove the signed memorandum was not to take effect as a contract unless a third-party engineer approved the invention.
2. Whether, given the asserted condition precedent and its nonoccurrence, any binding contract was formed.

## Decision

- The trial court instructed the jury to find for the defendants if it was arranged that the writing would be “no agreement” until the engineer approved; the jury found for the defendants.
- The plaintiff sought a new trial, arguing the parol evidence should have been excluded and the jury direction was erroneous.
- The Court of Queen’s Bench discharged the rule for a new trial and left the defense verdict in place.
- The court held the evidence was properly admitted because it addressed whether a contract ever came into existence, not the alteration of terms of an existing written agreement.

## Legal Principles

- The parol evidence rule bars extrinsic evidence offered to add to, vary, or contradict the terms of a concluded written contract.
- Parol evidence is admissible to show that a writing was not intended to operate as a binding contract unless and until a condition precedent to formation occurred.
- When the evidence establishes that the parties intended the writing to be inoperative absent the condition, and the condition fails, no contract is formed and no breach liability arises.

## Conclusion

The court affirmed a verdict for the defendants, holding that oral evidence was admissible to prove the signed memorandum was conditional upon an engineer’s approval and therefore never became an enforceable contract when that approval was not obtained.


Pym v. Campbell, 6 El. & Bl. 370 (Q.B. 1856)