Appellant purchasers challenged the judgment of the Superior Court of Los Angeles County (California) in favor of appellee sellers in appellants’ action for specific performance. Appellants claimed that the trial court erred in finding that the contract lacked essential terms as to the manner of payment of the purchase price and in finding that appellants breached the contract because the escrow account was opened one day late.
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Overview
Appellant purchasers brought an action for specific performance against appellee sellers, who refused to complete the sale of their property because they thought the price was too low. Following a trial, judgment was entered in favor of appellees. On appeal, the court reversed, holding that the trial court erred in finding that the contract lacked essential terms relative to the manner of payment of the contract price. The court found that the provision in appellants’ offer that made the sale subject to their being able to obtain a $ 52,000 loan, which was solely for their benefit, was not nullified when the loan commitment they received was for $ 1,000 less. The court held that when appellants signed supplemental escrow instructions within the required time period indicating that they were satisfied with the new loan commitment, they waived any condition precedent to their performance and defendants were contractually assured of obtaining the full purchase price in cash, and that such was the full extent of their rights in the matter. The court held that if there was a breach of the contract as to the timing of the opening of the escrow, it was due to appellee sellers’ actions.
Outcome
The judgment in favor of appellee sellers was reversed because the contract terms as to payment of the purchase price were clearly set forth in appellants’ supplemental escrow instructions, by which they waived their own condition precedent to financing, thereby binding themselves to the contract. Appellee sellers were obligated to perform.