Nelson v. Elway
Colorado Supreme Court
908 P.2d 102 (1995)
Nelson (plaintiff) negotiated to sell two dealerships to Elway (defendant), including an oral "service agreement" for Elway to pay Nelson $50 per vehicle sold for seven years, in place of a full cash price. When their lender threatened to pull financing if Nelson received any sale proceeds, Elway backed out of the oral service agreement, and the parties signed only a written "buy-sell agreement" containing a merger clause stating it was the final, complete agreement superseding all prior discussions. Elway later refused to honor the oral service agreement, and Nelson sued for breach of contract; the trial court and appellate court ruled for Elway.
Whether, when the parties intend a written contract's terms to be a final and complete integration of their agreement, those terms are enforceable and extrinsic evidence of a prior agreement is inadmissible.