Bell v. Elder
782 P.2d 545 (1989)
Rule of Law:
Where a contract's exchanged promises have no specified order of performance, the obligations are treated as concurrent conditions, and one party cannot claim a breach without first tendering (offering) their own performance.
Facts:
- In 1977, the Bells contracted to purchase ten acres of undeveloped land from a partnership known as the Elders.
- A typewritten clause in the original contract required Elders to furnish water, power, and roads by a certain date.
- A subsequent 'Supplemental Agreement' in 1978 modified these terms, stating that Elders would furnish utilities to the property at their own expense.
- This supplemental agreement also required the Bells to pay a $1,000 water hook-up and installation fee at the time of home construction.
- The supplemental agreement specified that if the Elders were 'unable to furnish these utilities on or before October 15, 1980,' they would have to repay the contract.
- The Bells ultimately decided not to build on the property and never applied for a building permit or paid the $1,000 hook-up fee.
- Elders did not install the culinary water line to the property but were found to be ready, willing, and able to do so.
Procedural Posture:
- The Bells (Plaintiffs) filed a lawsuit against the Elders (Defendants) in a Utah trial court.
- The Bells sought rescission of the real estate contract and restitution for amounts paid.
- Following a bench trial, the trial court entered a judgment dismissing the Bells' claims.
- The Bells (Appellants) then appealed the trial court's judgment to the Utah Court of Appeals.
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Issue:
Does a party's failure to actually perform a contractual promise constitute a breach when the contract does not specify an order of performance and the other party has not tendered performance of their own concurrent obligation?
Opinions:
Majority - J. Robert Bullock, Senior District Judge
No. A party's failure to perform does not constitute a breach when the performance is a concurrent condition and the other party has not tendered their own performance. The contract between the Bells and the Elders contained exchanged promises—Elders to furnish water and Bells to obtain a building permit and pay a hook-up fee—but it was silent on the order in which these promises were to be performed. In such cases, the common law construes these obligations as concurrent conditions, meaning performance is due at the same time. Because performance was due concurrently, neither party could claim a breach by the other until they tendered performance of their own obligation. The Bells never obtained a building permit or paid the fee, so they never put the Elders in default. This rule prevents a party from demanding a purposeless performance, like installing a water line to unused land, and avoids a deadlock where each party waits for the other to act first.
Analysis:
This decision reinforces the foundational contract law principle of constructive concurrent conditions, which applies when a contract is silent about the sequence of performance for mutual promises. The case clarifies that the requirement of 'tender' is not a mere procedural formality but a substantive prerequisite to claiming breach in such situations. It serves the practical purposes of preventing economic waste and deterring parties from using a pretext to escape contractual obligations they no longer find favorable. The ruling provides a clear framework for resolving deadlocks in executory contracts: the party seeking to enforce the contract must be the first to demonstrate its own readiness and willingness to perform.
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