La Salle National Bank v. Vega
167 Ill. App. 3d 154, 520 N.E.2d 1129 (1988)
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Rule of Law:
When a written agreement expressly states that it will only become a legally binding contract upon execution by a specific party, no contract is formed until that party signs the document in the manner prescribed.
Facts:
- A real estate sale document was drafted by counsel for the plaintiff, La Salle National Bank, as trustee, for the purchase of property from Mel Vega.
- The document included a rider stating: 'Upon execution of this contract by the Seller, this contract shall be presented to the trust for full execution. Upon the trust’s execution, this contract will then be in full force...'
- The plaintiff's purchasing agent, Bernard Ruekberg, signed the document and presented it to Mel Vega.
- On March 19, 1985, Mel Vega, the seller, signed the document.
- The document was never signed by the trustee for the purchaser, La Salle National Bank.
- No copy of the document executed by the trustee could be found in the bank's official records, and none was ever produced by any party.
Procedural Posture:
- La Salle National Bank, as trustee, (plaintiff) filed a first amended complaint against the estate and trustees of Mel Vega (defendants) in the circuit court of Du Page County, seeking specific performance of an alleged real estate contract.
- Jerold A. Borg, who had a separate contract to purchase the same property, was granted leave to intervene and filed a counterclaim against both plaintiff and defendants.
- Borg filed a motion for partial summary judgment, arguing that the alleged contract between La Salle and Vega was unenforceable because it was not properly signed.
- The trial court granted Borg’s motion for partial summary judgment, finding that no contract was ever formed between La Salle and Vega.
- The trial court entered judgment in favor of the defendants on La Salle's complaint and denied La Salle's petition for rehearing.
- La Salle National Bank (plaintiff-appellant) appealed the trial court's orders to the Appellate Court of Illinois.
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Issue:
Does a legally enforceable contract for the sale of real estate exist when the written agreement explicitly states it will only be in 'full force' upon execution by the purchaser's trustee, and the trustee never signs the document?
Opinions:
Majority - Presiding Justice Lindberg
No. A legally enforceable contract for the sale of real estate does not exist under these circumstances. The formation of a contract requires an offer and an acceptance. The language of the document was clear and unambiguous that the agreement would not be in 'full force' until executed by the plaintiff trustee. The presentation of the document by the purchaser's agent to the seller was not an offer, as it did not confer upon the seller the power to create a contract by signing. Instead, when the seller, Mel Vega, signed the document and returned it, he made an offer to the plaintiff trust. The document itself dictated that the exclusive mode of acceptance for this offer was the execution by the trustee. Since the trustee never signed the document, the offer was never accepted, and therefore no contract was ever formed.
Analysis:
This case serves as a crucial illustration of the 'master of the offer' principle in contract formation. It establishes that when parties explicitly define the conditions precedent to a contract's existence, such as a specific mode of acceptance, courts will strictly enforce those terms. The decision clarifies the distinction between preliminary negotiations or invitations to offer and a legally cognizable offer that creates a power of acceptance. This precedent reinforces the importance of precise drafting in contracts, as the court refused to infer acceptance or waive a clearly stated requirement, even when one party later sought to enforce the agreement.
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