Sabo v. Fasano

• Decision Date: 13 April 1984
• Citation: Sabo v. Fasano, 154 Cal.App.3d 502, 201 Cal.Rptr. 270 (Cal. App. 1984)
• Court: California Court of Appeals
• Parties: E. Lad SABO, Plaintiff and Appellant, v. Vincent FASANO, et al., Defendants and Respondents. Civ. B001079.

Page 270

201 Cal.Rptr. 270

154 Cal.App.3d 502

E. Lad SABO, Plaintiff and Appellant, v.Vincent FASANO, et al., Defendants and Respondents.

Civ. B001079.

Court of Appeal, Second District, Division 7, California.

April 13, 1984.

Hearing Denied June 21, 1984.

Kim, Stearns, Lines & Moore and William M. Reichert, Torrance, for plaintiff and appellant.

Walleck, Shane, Pelletier & Stanard and Roger L. Stanard, Woodland Hills, for defendants and respondents.

JOHNSON, Associate Justice.

In this action for specific performance between a buyer and seller of real estate, we hold where the offer to buy is conditioned on the sellers' acceptance within a specified time the buyer may waive the time limit and treat the seller's late acceptance as timely.The undisputed facts of this case show the buyer waived the sellers' late acceptance and that the sellers knew their late acceptance had been waived.Therefore, the trial court erred in granting judgment to the sellers.

FACTS AND PROCEEDINGS BELOW

The defendants, Mr. and Mrs. Fasano, listed their apartment building for sale in December 1976.The plaintiff, Mr. Sabo, executed an offer on December 23, 1976.The written offer in the form of a "Deposit Receipt" contained a provision common in real estate transactions that the offer would be deemed revoked if not accepted within a certain period (SeeC.E.B. California Real Property Sales Transactions(1981)§§ 3.7, 3.40, 3.60.)This particular offer provided that it "shall be deemed revoked unless accepted in writing within 5 days after the date hereof ...."

The broker handling this transaction did not present Sabo's offer to the Fasanos until the sixth day following its execution, December 29, 1976, one day after the expiration date stated in the offer.The Fasanos signed the Deposit Receipt on the day it was presented to them for acceptance.The following day the broker notified Sabo that the Fasanos had accepted his offer.Sabo knew the acceptance was late but made no objection.

After obtaining the Fasanos' signature on the Deposit Receipt, the broker had an escrow company open an escrow for Sabo's purchase of the Fasanos' property.The Deposit Receipt was placed in the escrow along with Sabo's deposit of $3,000.Sabo signed the first set of escrow instructions on January 11, 1977, and a second set of instructions on January 17, 1977.He also proceeded to arrange for financing and insuring the property.

The Fasanos admitted they signed the Deposit Receipt with the intent to be bound by it.They did not sign either set of escrow instructions.However, the uncontradicted evidence indicates the escrow instructions were prepared by the broker and the Fasanos not only knew that escrow instructions had been prepared but participated in their drafting.In addition, in early January 1977 Sabo told an attorney representing the Fasanos that he believed he and the Fasanos had a contract and told the Fasanos, in a letter dated March 14, 1977, he intended to go forward with the transaction.Finally, a letter dated March 22, 1977, to Sabo's attorney from the Fasanos' attorney states: "I represent Mr. and Mrs. Vincent Fasano, parties to an agreement of sale with Mr. E. Lad Sabo.I have a copy of his letter of 14 March 1977 ....[p] The Fasanos will certainly comply with the contract of December 23 ...."

The trial court granted judgment to the Fasanos.It held the Fasanos' signature on the Deposit Receipt could not constitute an acceptance of Sabo's offer because the offer had already expired.The Fasanos' late signatures on the Deposit Receipt constituted a counter-offer which was not accepted in writing by Sabo or, if the escrow instructions were an acceptance, that acceptance was not communicated to the Fasanos.Alternatively, the court found that assuming Sabo waived the Fasanos' late acceptance, there was no communication of that waiver to the Fasanos and, therefore, no mutual assent to the purported agreement.

DISCUSSION

It is well-settled a contracting party may waive conditions placed in a contract solely for that party's benefit.(Doryon v. Salant(1977)75 Cal.App.3d 706, 712, 142 Cal.Rptr. 378 and cases cited therein.)The provision in an offer specifying the means of acceptance is such a condition and may be waived by the offeror.(Artukovich v. Pacific States etc. Pipe Co.(1947)78 Cal.App.2d 1, 3, 176 P.2d 962;Gallwey v. Galbreath(1919)45 Cal.App. 120, 122, 187 P. 73;cf.Rice Lands Etc. Co. v. Blevins(1923)61 Cal.App. 536, 541, 215 P. 402.)We find no reason why this rule should not apply in the case of a time limit imposed by the offeror for acceptance by the offeree.

Civil Code section 1587 provides an offer is revoked "[b]y the lapse of time prescribed in such proposal for its acceptance, or if no time is so prescribed, the lapse of a reasonable time without communication of the acceptance ...."In Forbes v. Board of Missions(1941)17 Cal.2d 332, 339, 110 P.2d 3, our Supreme Court held the reasonable time condition implied by law could be waived by the offeror's failure to object to an unreasonable delay.The owners of real property, Mr. and Mrs. Zapata, offered to deed the property to their church subject to a life estate and the church's agreement to provide an education to a young relative.The offer was not accepted until almost seven months after it had been delivered to the church.The executed agreement was then delivered to Mrs. Zapata and the deed recorded.(Mr. Zapata had died in the interim.)Following Mrs. Zapata's death, her executor sued the church to set aside the deed and quiet title to the property.The trial court found the lapse of over six months between the offer by the Zapatas and the acceptance by the Board of Missions was unreasonable and that therefore the offer was "revoked ... by the lapse of a reasonable time without communication of acceptance or acceptance of said offer or proposal by defendant church."(Ibid. )Nevertheless, the Supreme Court reversed the judgment for the executor holding that while the issue of what constituted a reasonable time between the offer and acceptance was a question of fact, Mrs. Zapata "... made no objection to the delay, received the agreement and gave ... her written receipt for the same.She thereby waived the right to complain of said delay."(Ibid.)

Later, in Davies v. Langin(1962)203 Cal.App.2d 579, 21 Cal.Rptr. 682, the waiver theory was used to enforce a contract on behalf of another late-accepting offeree against the offeror.The offeror, Langin, offered to sell his real property to the offeree, Davies.The offer was expressly left open for two days.The offeree signed his acceptance the next day, but the acceptance was not communicated to the offeror until five or six days after the offer, at which time the offeror indicated that he was pleased the deal had been closed.(Id. at pp. 581-582, 21 Cal.Rptr. 682.)"The facts ... clearly show that appellant made no attempt to rely upon the two-day requirement provided in his offer, but, on the contrary, indicated that an acceptance made at a later date was entirely agreeable to him.Under these circumstances, it cannot be said that the trial court erred in finding that appellant waived compliance with the two-day acceptance requirement of the offer."(Id. at p. 584, 21 Cal.Rptr. 682.)The court went on to say the expiration or revocation of an offer creates "a right on the part of the offeror to refuse to recognize a belated acceptance.In Forbes v. Board of Missions[supra]the court held this right was waived by an offeror who chose to ignore the delay and treat the acceptance as timely.The same reasoning would appear equally applicable to the case at bar."(Id. at p. 585, 21 Cal.Rptr. 682.)¹

Other jurisdictions are in accord with the view expressed in Forbes and Davies, that one who makes an offer and fixes a time for its acceptance may waive the time and bind the late-accepting party.(See, e.g., Kansas City v. Industrial Gas Co.(1934)138 Kan. 755, 28 P.2d 968, 970;W.B. Leedy & Company v. Shirley(1958)97 Ga.App. 801, 104 S.E.2d 580, 585;Nichols v. Nicholas(1958)217 Md. 79, 141 A.2d 746, 748;Beirne v. Alaska State Housing Authority(Alaska1969)454 P.2d 262, 264-265;Maclay v. Harvey(Ill.1878)90 Ill. 525, 530.)

We recognize there is an alternative view, held by respected legal scholars and courts of other jurisdictions, that "[u]nless the offeree exercises his power of acceptance before [the offer] expires, there is no contract, for there is no power to accept.Therefore, where the offer has terminated by lapse of time, an attempt to accept is ineffectual to create a contract....Once terminated ... the original offer can never be revived."(Kurio v. United States(S.D.Tex.1970)429 F.Supp. 42, 64, 65;see alsoHouston Dairy v. John Hancock Mut. Life Ins. Co.(5th Cir.1981)643 F.2d 1185, 1186;22 West Main Street, Inc. v. Boquszewski(1970)34 A.D.2d 358, 311 N.Y.S.2d 565, 567-568;Frandsen v. Gerstner(1971)26 Utah 2d 180, 487 P.2d 697, 700;Wax v. Northwest Seed Co.(1937)189 Wash. 212, 64 P.2d 513, 515;Morrison v. Rayen Investments, Inc.(1981)97 Nev. 58, 624 P.2d 11, 12.)This view is based on the theory that "[u]ntil the end of [the time limit on the offer] the offer is regarded as being constantly repeated.After that there is no offer, and, properly considered, nothing to withdraw."(1 Williston on Contracts (3rd ed. 1957) § 93, p. 337;see also1 Corbin on Contracts (1963) § 74, p. 313;Rest., Contracts(2nd ed. 1981) § 70, pp. 169-170;1 Witkin, Summary of Cal.Law (8th ed. 1974) Contracts, § 149, p. 144.)Those who hold this view treat the late acceptance as a counter-offer which must be accepted by the original offeror to create a contract.(Ibid.)

Other courts have expressed the view, with which we tend to agree, that regardless of the legal analytical vehicle, i.e., counter-offer and acceptance or waiver of the time limitation for...