Gazvoda v. Wright
872 N.E.2d 219, 2007 WL 2284722 (2007)
Premium Feature
Subscribe to Lexplug to listen to the Case Podcast.
Rule of Law:
A real estate purchase agreement is an enforceable contract if it contains all essential terms, including the parties, subject matter, purchase price, and time for performance. A financing contingency is a condition for the benefit of the buyer that may be waived, and a seller cannot use an incomplete financing addendum to void the contract if the buyer is ready, willing, and able to perform.
Facts:
- On March 24, 2005, Robert Wright offered to purchase a residential property owned by Paul A. Gazvoda.
- Gazvoda made a written counteroffer for $168,500 with a closing date 'on or before May 10, 2005.'
- On March 25, 2005, Wright accepted and signed the counteroffer, which included a financing addendum where the specific terms of the loan were left blank.
- Wright subsequently obtained the necessary financing to purchase the property.
- Prior to the closing date, Gazvoda informed his agent that he no longer wished to sell the property due to personal reasons involving his wife filing for divorce.
- Gazvoda refused to attend the closing or sell the property to Wright on May 10, 2005.
Procedural Posture:
- Robert Wright (Plaintiff) filed a complaint for specific performance against Paul A. Gazvoda (Defendant) in the trial court.
- Following a bench trial, the trial court entered judgment in favor of Wright, ordering Gazvoda to sell the property.
- Gazvoda (Appellant) appealed the trial court's judgment to the Court of Appeals of Indiana.
Premium Content
Subscribe to Lexplug to view the complete brief
You're viewing a preview with Rule of Law, Facts, and Procedural Posture
Issue:
Does a real estate purchase agreement constitute an enforceable contract when it specifies the parties, subject matter, price, and closing date, even if an attached financing addendum is left blank?
Opinions:
Majority - Friedlander, J.
Yes, the real estate purchase agreement is an enforceable contract. For a contract for the sale of real estate to be enforceable, it must be in writing and contain the essential terms: the parties, the subject matter, the purchase price, and the time for performance. The agreement between Gazvoda and Wright clearly identified all of these essential terms. Gazvoda's argument that the blank financing addendum rendered the contract an unenforceable 'agreement to agree' is incorrect. A financing contingency is a condition precedent for the benefit of the buyer, which the buyer may waive. Because Wright obtained financing and was prepared to close, he satisfied the condition. Gazvoda's refusal to sell was a case of 'seller's remorse' and not a legally valid reason to void a valid, enforceable contract.
Analysis:
This decision reaffirms the core contract principle that an agreement is enforceable so long as its essential terms are definite. It clarifies that a financing contingency clause is typically for the buyer's protection and cannot be used by the seller as a pretext to escape contractual obligations, especially when the buyer has waived the contingency by securing funds. The case distinguishes between a fatal lack of essential terms and the non-completion of a waivable, non-essential condition, providing guidance on what makes a purchase agreement binding and limiting the scope of the 'agreement to agree' defense.
