Centerville Builders, Inc. v. Wynne

• Decision Date: 24 October 1996
• Docket Number: No. 95-414-A,95-414-A
• Citation: 683 A.2d 1340
• Parties: CENTERVILLE BUILDERS, INC. v. J. Brendan WYNNE. ppeal.
• Court: Rhode Island Supreme Court

Page 1340

683 A.2d 1340

CENTERVILLE BUILDERS, INC. v. J. Brendan WYNNE.

No. 95-414-Appeal.

Supreme Court of Rhode Island.

Oct. 24, 1996.

Michael St. Pierre, Warwick, for Plaintiff.

John Marks, J. William Harsch, Washington, DC, for Defendant.

OPINION

PER CURIAM.

This matter came before us on September 25, 1996, pursuant to an order directing both parties to appear and show cause why the issues raised in this appeal should not be summarily decided. The plaintiff, Centerville Builders, Inc. (the buyer), appeals from the granting of a motion for judgment on the pleadings by the Superior Court in favor of the defendant, J. Brendan Wynne (the seller). After hearing the arguments of counsel and examining the memoranda filed by the parties, we conclude that cause has not been shown and that the appeal should be decided at this time.

The buyer's claim for specific performance arises out of an alleged agreement with the seller for the sale and purchase of a tract of land located at 295 Forge Road, Warwick, Rhode Island (the property). In a document captioned "Offer to Purchase," dated September 2, 1993, the buyer deposited $5,000 towards the purchase of the property for the sum of $565,000, with a total deposit of 5 percent of the sale price ($28,250) due upon signing of the purchase-and-sales agreement. There were nine numbered conditions outlined in the offer to purchase. The seller signed the document on September 7, 1993, after deleting the ninth condition, which read:

"9. SUBJECT TO SELLER CEASING NEGOTIATIONS WITH ANY AND ALL OTHER PARTIES ON PURCHASE OF SUBJECT PROPERTY."

The agreement also contained a condition that provided:

"6. SUBJECT TO SATISFACTORY PURCHASE & SALES AGREEMENT BETWEEN SELLER AND BUYER."

Subsequently, the seller sent the buyer an unsigned purchase-and-sale-agreement form. The buyer signed the agreement and returned it to the seller. The seller requested and received an extension of time to sign the agreement. On October 20, 1993, the date the extension expired, the seller notified the buyer that the seller wanted to "get more money" for the property and would therefore put the property back on the market.

The buyer filed this action for breach of contract in Superior Court, seeking specific performance of the purchase-and-sale agreement. The seller made a motion for judgment on the pleadings pursuant to Rule 12(c) of the Superior Court Rules of Civil Procedure. In a written decision filed on March 6, 1995, the Superior Court denied the seller's motion. An order embodying this ruling entered on March 27, 1995.

The seller then made a motion for reconsideration, and on June 12, 1995, the Superior Court issued a written decision holding the offer-to-purchase agreement illusory and unenforceable. The Superior Court reversed its prior decision, granted the seller's motion for judgment on the pleadings, and entered an order to that effect on July 7, 1995. On July 13, 1995, the buyer appealed to this court.

We believe that there was no enforceable contract because there was no mutuality of obligation. Therefore, we agree with the motion justice that the seller was entitled to a judgment on the pleadings.

It is a fundamental principle of contract law that a bilateral contract requires mutuality of obligation. Crellin Technologies, Inc. v. Equipmentlease Corp., 18 F.3d 1, 7 (1st Cir.1994) (applying Rhode Island law); B & D Appraisals v. Gaudette Machinery Movers, Inc., 733 F.Supp. 505, 507 (D.R.I.1990) ("[a] bilateral contract involves mutual promises which simultaneously obligate the parties"). This mutuality is achieved when both parties are "legally bound through the making of reciprocal promises." Crellin Technologies, Inc., 18 F.3d at 7-8. However, when the promises of the parties depend on the occurrence of some future event within the unilateral control of the promisors, the promises are illusory and the agreement is nonbinding. Id. at 8; Antone v. Vickers, 610 A.2d 120, 123 (R.I.1992).

In the instant case, the buyer and the seller entered into a written offer-to-purchase agreement whereby the former would purchase the property, and the latter would sell it. However, their promises were illusory since each party reserved the unfettered discretion to thwart the purchase and sale by unilaterally invoking condition 6 of the offer-to-purchase agreement and rejecting any purchase-and-sale agreement as "unsatisfactory."

Although it is true that the seller displayed an intent to be bound by the offer-to-purchase agreement when he signed the document and agreed to...