## Facts

- Property owners contracted to sell a two-acre parcel in Suffolk County, New York, to W.W.W. Associates, Inc. for $750,000, with a down payment and deferred financing secured by a purchase-money mortgage.
- The contract used a printed form with typed rider provisions, including a merger clause stating the writing fully expressed the parties’ agreement and disclaimed reliance on extra-contractual statements.
- A rider provision addressed pending litigation involving the property and provided that if closing was delayed due to that litigation, closing would be adjourned; if the litigation was not concluded by June 1, 1987, “either party” could cancel and the down payment would be returned.
- Other riders granted cancellation rights only to the purchaser in specified circumstances.
- The litigation was not concluded by June 1, 1987; on June 2, 1987, the sellers sent notice canceling the contract under the rider and returned the down payment.
- W.W.W. rejected the cancellation, claimed the clause was intended solely for its benefit and could be unilaterally waived, and sued for specific performance, alleging the sellers canceled to pursue a higher price.

## Issues

1. Whether a clear, reciprocal cancellation clause in a real-estate contract may be recharacterized through extrinsic evidence as a purchaser-only contingency subject to unilateral waiver.
2. Whether extrinsic evidence of negotiations is admissible to create ambiguity or vary an unambiguous written agreement containing a merger clause.
3. Whether allegations of bad faith in exercising an express contractual cancellation right preclude summary judgment.

## Decision

- The New York Court of Appeals reversed the Appellate Division and reinstated summary judgment for the sellers, dismissing the specific performance action.
- The Court held the cancellation clause unambiguous on its face: it granted “either party” the right to cancel if the litigation was not concluded by June 1, 1987.
- Because the written contract was complete and unambiguous, the Court held extrinsic evidence inadmissible to alter the clause or to manufacture ambiguity.
- The sellers validly exercised their express contractual right to cancel; the purchaser was not entitled to specific performance.
- Allegations that the sellers acted in bad faith did not raise a triable issue sufficient to defeat summary judgment where the cancellation right was clear and properly invoked.

## Legal Principles

- When parties reduce their agreement to a clear, complete writing, courts enforce the contract according to its terms.
- The parol evidence rule generally bars extrinsic evidence offered to add to, vary, or contradict an unambiguous written agreement.
- Contract ambiguity is a question of law determined from the writing itself; extrinsic evidence may interpret an ambiguity but cannot be used to create one.
- A merger clause strengthens the inference that the writing is the exclusive statement of the parties’ agreement and limits reliance on pre-contract negotiations.
- In real-estate contracts, certainty and predictability support strict enforcement of unambiguous risk allocations expressed in the contract.

## Conclusion

The court enforced the contract’s plain language, holding that a reciprocal cancellation clause allowed either party to cancel when the specified litigation contingency remained unresolved by the stated date, and it refused to admit extrinsic evidence to recast the clause as purchaser-only or waivable.


W.W.W. Assocs., Inc. v. Giancontieri, 77 N.Y.2d 157, 566 N.E.2d 639 (1990)