Nelson v. Elway

908 P.2d 102 · Supreme Court of Colorado · 1995

Facts

Nelson sought to sell his car dealerships to Elway and Buscher, negotiating an oral "Service Agreement" for his compensation, which was conditional on GMAC's approval. GMAC later prohibited Nelson from receiving proceeds, leading Elway and Buscher to refuse the Service Agreement, despite Nelson's alleged reliance on it before signing "keeper letters" to GMAC. Nelson sued for breach of contract, promissory estoppel, and civil conspiracy, among other claims.

Issue

Did the court of appeals err in finding a material issue of fact for promissory estoppel, given that the alleged oral promise was expressly conditional on GMAC's approval, which was not met? Did the court err in upholding summary judgment on breach of contract and civil conspiracy claims?

Holding

The Supreme Court reversed the court of appeals, holding that the conditional nature of the alleged promise precluded the promissory estoppel claim as a matter of law. The Court affirmed the court of appeals' decision in all other respects, upholding summary judgment for the respondents on the breach of contract and civil conspiracy claims.

Rule

Under Restatement (Second) of Contracts § 91, when a promise is conditional, any detrimental change of position by the promisee prior to the occurrence of the condition is unreasonable as a matter of law, thus precluding a claim for promissory estoppel. Merger clauses in written contracts between sophisticated parties bar extrinsic evidence of prior oral agreements, and part performance must be substantial and exclusively referable to the alleged oral agreement to overcome the statute of frauds.

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Case brief last reviewed 2026-04-27. Prepared by CaseReader from the published opinion.