Omni Group, Inc. v. Seattle-First National Bank
Facts
Clark executed an exclusive agency agreement with Royal Realty to sell 59 acres of real estate for $3,000 per acre. Royal offered the property to Omni Group, Inc. (P) which then signed an earnest money agreement offering $2,000 per acre. The agents delivered the signed contract to Clark but he then directed the agents to obtain further consideration from Omni to make certain improvements on adjacent land not being offered for sale. Those conditions were not communicated to Omni. The purchase of the property was subject to Omni’s obtaining an engineer’s and architect’s feasibility report with notification to Clark within 15 days of their final acceptance of the transaction.
Problems developed and it was discovered that the land was only 50.3 acres and Clark countered with an offer of $104,000. Omni also agreed to accept all of Clark’s other demands that were not relayed by the agents to the transaction. Clark then refused to proceed with the sale. Clark contended that the required report made the contract illusory. The trial court agreed and Omni appealed.
Issue
- Is a promise that is dependent upon a condition of personal satisfaction illusory?
Holding and Rule of Law
- No. A promise that is dependent upon a condition of personal satisfaction is not illusory.
Where there is a condition precedent to the promissor’s duty that the promissor be satisfied, such an agreement may require performance that is personally satisfactory to the promissor, or performance that would be acceptable to a reasonable person.
Whether the promissor is actually satisfied or a reasonable person would have been satisfied is a question of fact. In neither case however is the promissor’s promise rendered illusory. Under these facts Omni reserved to itself the power to cancel or terminate the contract. Omni can cancel by failing to give notice only if the feasibility report is not satisfactory. Otherwise the plaintiff is bound to give notice and purchase the property. This agreement does not render Omni’s promise illusory.
Disposition
Reversed and remanded.