Omni Group, Inc. v. Seattle-First Nat’l Bank

Court of Appeals of Washington, 1982.

32 Wash.App. 22, 645 P.2d 727.

Dawson, pp. 302-306

 

Facts: Omni was contracting to buy land from the Clarks.  The Clarks backed out and argued that they weren’t bound by the earnest money agreement because Omni’s performance was conditional and thus its promise was illusory.  The trial court entered a judgment for the Clarks’ estate, and Omni appealed.

 

Issue: Was Omni’s promise illusory because it was conditional?

 

Rule: A promise dependent on the promisor’s “satisfaction” or the quality of the promisee’s performance is not illusory. 

 

Analysis: The court finds two conditions upon which Omni’s performance depends: (1) Omni must receive an “engineer’s report” and (2) the report must be “satisfactory” to Omni.  The court finds that Omni has not given itself the unfettered power to get out of the contract at any time for any reason; rather, Omni can’t cancel unless the report is unsatisfactory, and it would be up to the factfinder to decide whether Omni cancelled in good faith under the circumstances.

 

Conclusion: The trial court’s ruling is overturned and specific performance of the earnest money agreement is ordered.

 

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