Chirichella v. Erwin
270 Md. 178, 310 A.2d 555 (1973)
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Rule of Law:
A contract provision that sets a time for performance by referencing another event and an approximate date is a timing mechanism, not a condition precedent. Unless the language clearly expresses an intent to make performance conditional, the duty to perform arises after a reasonable period of time has passed.
Facts:
- In April 1971, the Chirichellas contracted to purchase a new home in Kettering, with settlement to occur upon its completion.
- In June 1971, the Chirichellas contracted to sell their existing home to the Erwins for $39,200.
- The sales contract with the Erwins was amended to state that settlement would "Coincide with settlement of New Home in Kettering Approx. Oct. '71."
- The Chirichellas' new home was not ready for settlement by October 1971.
- When the new home was eventually scheduled for settlement in June 1972, the Chirichellas refused to close, alleging 84 defects in its construction.
- The Chirichellas never settled on their new Kettering home.
- Citing their failure to settle on the new home, the Chirichellas refused to settle with the Erwins on the sale of their old home.
Procedural Posture:
- The Erwins (plaintiffs) sued the Chirichellas (defendants) in the Circuit Court for Montgomery County, a state trial court, seeking specific performance of the real estate contract.
- After a trial, the chancellor found in favor of the Erwins and entered a decree ordering the Chirichellas to perform the contract.
- The Chirichellas (appellants) appealed the trial court's decree to the Court of Appeals of Maryland, the state's highest court.
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Issue:
Does a contract clause stating that settlement on the sale of a house shall "Coincide with settlement of New Home... Approx. Oct. '71" create a condition precedent that must be met before the seller's duty to sell the house arises?
Opinions:
Majority - Levine, J.
No. A contract clause stating that settlement will 'Coincide with settlement of New Home... Approx. Oct. '71' does not create a condition precedent, but instead merely sets a convenient time for performance. The court reasoned that a condition precedent is a fact that must exist before a duty to perform arises, and its existence depends on the parties' intent as expressed through their words. To create a condition, parties typically use clear conditional language such as 'if,' 'provided that,' or 'subject to.' The phrase in this contract, particularly the inclusion of 'Approx. Oct. '71,' did not express a clear intent to make the sale to the Erwins contingent upon the Chirichellas' settlement on the new home. Instead, it only served to set a flexible time for settlement, meaning the Chirichellas were required to perform within a reasonable time after October 1971, which had long since passed.
Analysis:
This decision reinforces the judicial preference for interpreting ambiguous contract terms as promises or timing mechanisms rather than as strict conditions precedent, which can lead to forfeiture. The court signals that for a provision to be treated as a condition precedent, the parties' intent must be expressed in clear, unambiguous language. This case serves as a guideline for contract drafters, emphasizing that if an obligation is intended to be truly conditional upon another event, that condition must be explicitly stated using established conditional phrasing. The ruling protects parties from losing the benefit of their bargain due to external events that are vaguely linked to the timing of performance.
