Edmund J. Flynn Co. v. Schlosser

Brief Fact Summary.

A party agreed to purchase the cooperative apartment of another.  The purchasing party, before the time for performance, attempted to revoke her offer to purchase the cooperative apartment.

Synopsis of Rule of Law.

The condition involved was "a condition precedent to the obligation immediately to perform the contract."

Facts.

The Appellee, Schlosser (the "Appellee"), was a perspective purchaser of a cooperative apartment.  The Appellant, Edmund J. Flynn Co. (the "Appellant"), was the agent of the seller of the cooperative.  The Appellee attempted to revoke her offer to purchase the cooperative before the time for performance.  The agreement specified that the Appellee had to be approved by the board of directors of the cooperative before the transaction could be consummated.  The Appellant sued for breach of contract and the trial court found for the Appellee.  The Appellant appeals.

Issue.

Is the condition in the parties' agreement "a condition precedent to the existence of a binding contract to purchase the apartment or a condition precedent to the obligation immediately to perform the contract?'

Held.

It is "a condition precedent to the obligation immediately to perform the contract."  The court first examines when a "condition precedent is a prerequisite to the existence of a contract."  The court observes two specific types of cases where a condition precedent is applied in this fashion:  "(1) Where because of a 'conditional acceptance' to an offer no mutual assent occurs and thus no contract arises, and (2) where the effect of a contract is conditional on its validation by some 'superior' or 'higher' authority, reflecting a limited power in an agent to bind a principal."  The court recognized and answered in the affirmative, based on the fact before it, that the first question was whether the parties mutually agreed to the purchase and sale of the cooperative apartment.  As such, both parties were bound by the agreement and neither could unilaterally revoke.  The court then held "that the parties to the contract mutually agreed on the purchase and sale of this cooperative apartment. The condition, approval by the board of directors of the cooperative, was also a result of the mutual agreement. Neither party was obligated to perform until the happen[ ]ing of the condition, but neither party could rightfully revoke or withdraw in the meantime."

Discussion.

This court offers an interesting discussion on how to construe conditions.