Jackson Hole Builders v. Piros
Decision Date | 23 November 1982 |
Docket Number | No. 5707,5707 |
Citation | 654 P.2d 120 |
Parties | JACKSON HOLE BUILDERS, a Wyoming corporation, Appellant (Defendant), Jackson Hole Realty, a Wyoming corporation, and Paul McCollister, (Defendants), v. R.J. PIROS and Helen O. Piros, Appellees (Plaintiffs). |
Court | Wyoming Supreme Court |
David R. Hansen, Teton Village, for appellant.
David K. Larson, of Jackson, for appellee.
Before ROSE, C.J., and RAPER, THOMAS, ROONEY and BROWN, JJ.
Appellees-buyers instituted this action for a judgment declaring the rights and duties of the parties to a contract between appellees (and their assignors) and appellant-seller. 1 The contract was one for sale by appellant to appellees of three condominium units yet to be constructed by appellant. Appellees also prayed in their complaint for a return of money deposited by them in escrow pursuant to the contract. In addition to appellant, Jackson Hole Realty and Paul McCollister were made defendants in the action. McCollister is a real estate broker and principal agent for Jackson Hole Realty. He was designated as the escrow agent under the contract. The judgment of the trial court was generally for appellees and directed a return of the escrowed deposit.
The issues on appeal in this case involve the interpretation of the following three paragraphs in the contract:
Specifically the issues on appeal are:
1. Whether or not the provision in paragraph 3 of the contract authorizing only seller to terminate the contract for failure to obtain interim construction financing which required a presale of two-thirds of the units or if "[seller] does not for any reason begin construction of the project by June 1, 1981" makes the contract void from its inception for lack of mutuality and failure of consideration?
2. Whether or not seller breached its agreement by failing to sell two-thirds of the units before proceeding with the project?
3. Whether or not seller breached its agreement when it located financing for buyers at a higher rate than required by paragraphs 4 and 8 of the contract but offered to pay the difference resulting therefrom?
We reverse inasmuch as there was mutuality and consideration in the contract and inasmuch as seller did not breach the contractual requirements of paragraphs 3, 4 and 8.
The contract was one in which seller agreed to construct condominium units according to certain plans and specifications and in which buyers agreed to pay a specified amount of money to purchase them. Subsequent to the execution of the contract, buyers requested certain design changes in the plans. Seller agreed, and the changes were included in the construction.
Mutuality in the sense that there must be a meeting of the minds as to the terms and conditions of the agreement or that both parties must assent to the agreement is required for the existence of a contract. Shellhart v. Axford, Wyo., 485 P.2d 1031 (1971); Crockett v. Lowther, Wyo., 549 P.2d 303 (1976). However, "mutuality of obligation" is not always a proper criterion by which to determine the existence of necessary consideration, as is here argued by buyers.
"(c) 'mutuality of obligation.' " Restatement of Contracts 2d., § 79, p. 200 (1981).
* * * "Calamari and Perillo, Law of Contracts, (2nd Ed.1977), § 4-14, p. 157.
"Mutuality of obligation should be used solely to express the idea that each party is under a legal duty to the other; each has made a promise and each is an obligor. * * * " 1A Corbin on Contracts, § 152, p. 4 (1963).
Seller did not sell two-thirds of the units before it began construction of the project on June 22, 1981. Subsequently, buyers indicated their desire to terminate the contract. At that time, seller was constructing the project. The contract was no longer executory on its part. The "mutuality of obligation" concept was never applicable to a contract involving an exchange of a promise for performance. Calamari and Perillo, supra, § 4-15. The minds of the parties were in accord that if the seller could not obtain sufficient interim construction financing he may give notice to buyers and the contract would terminate. This is not an illusory promise, i.e., one which makes performance of it entirely optional. Seller was committed to perform if the interim construction financing could be obtained. The requirement for sale of two-thirds of the units was anticipated to be a requirement of "the Bank providing interim construction financing." The requirement for presale of two-thirds of the units was obviously not pertinent inasmuch as the interim construction financing was either provided or was unnecessary as evidenced by the fact that the construction was accomplished. Before seller could make paragraph 3 of the contract a basis for termination of it, seller would have to establish its inability to obtain the interim construction financing, either because of failing to sell two-thirds of the units or because there was other reason for failure to begin timely construction. The necessity for seller to do so makes it impossible to characterize seller's obligation as illusory. Performance was not entirely at its option. Calamari and Perillo, supra, § 4-17; Restatement of Contracts 2d, supra, § 77.
Laclede Gas Company v. Amoco Oil Company, 522 F.2d 33, 36 (8th Cir.1975).
The question to be resolved is whether one party's right of cancellation has rendered all of its other promises in the agreement so illusory that there was a complete failure of consideration. See Laclede Gas Company v. Amoco Oil Company, supra; Shattuck v. Precision-Toyota, Inc., 115 Ariz. 586, 566 P.2d 1332 (1977); Bleecher v. Conte, 29 Cal.3d 345, 173 Cal.Rptr. 278, 626 P.2d 1051 (1981); Best v. Realty Management Corp., 174 Pa.Super. 326, 101 A.2d 438 (1953); Pacific Pines Construction Corporation v. Young, 257 Or. 192, 477 P.2d 894 (1970); and Hine v. Vilter, 88 Wis.2d 645, 277 N.W.2d 772 (1979)....
To continue reading
Request your trial-
Reichert v. Daugherty
...permitted uses and required maintenance. An illusory promise is one that makes performance entirely optional. Jackson Hole Builders v. Piros , 654 P.2d 120, 122 (Wyo. 1982). The owner of Lot 7 is required to maintain the Lot 8 restricted use area, and nothing in the language of Plat 701 sug......
-
Raymond v. Steen
...we said: A contract comes into being when there is a meeting of the minds concerning the terms of the agreement. Jackson Hole Builders v. Piros, 654 P.2d 120, 122 (Wyo.1982). The existence of a contract depends upon the intent of the parties and presents the trial court with a question of f......
-
Anderson Excavating and Wrecking Co. v. Certified Welding Corp., 88-80
...Certified. A contract comes into being when there is a meeting of the minds concerning the terms of the agreement. Jackson Hole Builders v. Piros, 654 P.2d 120, 122 (Wyo.1982). The existence of a contract depends upon the intent of the parties and presents the trial court with a question of......
-
Wyoming Sawmills, Inc. v. Morris
...reference to this proposition. The existence of a contract requires a meeting of the minds of the parties to it. Jackson Hole Builders v. Piros, Wyo., 654 P.2d 120 (1982); Crockett v. Lowther, Wyo., 549 P.2d 303 (1976). An unconditional, timely acceptance of an offer, properly communicated ......