Yes, the deal was legally binding from the moment the bank accepted the bid. All the talk about signing final papers and paying a deposit were just follow-up steps to complete the deal they had already agreed on. They weren't 'get out of jail free' cards for the bank. The court looked at how both sides acted—they agreed on the price, the loan, and they were working to close the deal. The bank only backed out to make more money, which was a breach of the contract they had already formed.

Yes, the bank had to sell the loan to Stonehill because they had already formed a binding agreement when they accepted Stonehill's bid. The requirements to sign paperwork and pay a deposit were just steps needed to complete the sale, not conditions that had to be met before a contract existed. It's like if you agree to buy someone's car for $5,000, and they accept your offer but say 'we'll sign the title transfer and you'll pay me next week' - you already have a deal, those are just the steps to finish it. The bank didn't back out because Stonehill refused to sign papers or pay the deposit - Stonehill was ready to do both. The bank backed out because they realized they could make more money ($1.8 million more) by not selling to Stonehill. That's not a valid reason to break an agreement. The court looked at all the communications between the parties and their actions, which showed they both intended to make a deal. The bank's claim that they could withdraw from the sale at any time didn't give them the right to cancel after they had already accepted Stonehill's bid.

Yes, a binding contract was formed. Based on the totality of the parties' actions and communications, they manifested a mutual intent to enter into an enforceable agreement with express material terms, and the execution of a written agreement and submission of a deposit were post-formation requirements for performance, not conditions precedent to the contract's existence. The court reasoned that BOTW's acceptance of Stonehill's bid—which confirmed the material terms of price, the specific asset, and closing logistics—created a meeting of the minds. The phrase 'subject to' in the confirmation email was not a sufficiently 'forthright, reasonable signal' to override the parties' objective conduct showing an intent to be bound. Unlike cases with clear, unambiguous language conditioning a deal on a final signed writing, BOTW's communications and actions indicated the sale was moving forward, and its internal documents revealed its motive for withdrawal was economic opportunism, not the failure to satisfy a condition.

Yes. BOTW's acceptance of Stonehill's bid, followed by confirmatory communications, constituted a binding contract. Based on the totality of the parties' actions and communications, they agreed to an enforceable contract with express material terms and post-formation requirements. The conditions cited by BOTW—signing of the agreement and the deposit—were not preconditions to the contract's formation but were post-agreement requirements necessary for the consummation of the transfer. The 'subject to' language in the April 27 email did not clearly express an intent not to be bound to the sale of the Goett Loan. There is a critical legal distinction between conditions precedent to performance and those prefatory to the formation of a binding agreement. The signed writing and deposit were post-agreement requirements, not conditions precedent to contract formation. BOTW's withdrawal was not based on Stonehill's failure to execute a written agreement or tender the deposit, but because BOTW concluded it would make more money by reneging on the sale after learning about the refinancing. BOTW's disclaimer in the Memorandum that it reserved the right to withdraw assets from the sale at any time did not permit it to withdraw an acceptance of an offer. Stonehill met its prima facie burden on summary judgment by showing that BOTW accepted Stonehill's bid, the parties entered a binding agreement, BOTW breached that agreement, and the breach caused Stonehill to suffer monetary damages of over $1.8 million. BOTW failed to establish the existence of material issues of fact that would prevent summary judgment.

Stonehill Capital Management LLC v. Bank of the West

Case Podcast

Rule of Law:

The Legal Principle

Facts:

Procedural Posture:

How It Got Here

Issue:

Legal Question at Stake

Opinions:

Majority, Concurrences & Dissents

Analysis:

Why This Case Matters

Gunnerbot