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MATTEI V. HOPPER, Supreme Court of CA, 1958. 51 Cal.2d 119, 330 P.2d 625

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MATTEI V. HOPPER, Supreme Court of CA, 1958. 51 Cal.2d 119, 330 P.2d 625 Powered By Docstoc
					CONTRACTS
MATTEI V. HOPPER, Supreme Court of CA, 1958. 51 Cal.2d 119, 330 P.2d 625. History: After a trial w/out a jury, court concluded the agreement was “illusory” and lacking in “mutuality”; from judgment entered for Defendant, Plaintiff appeals Facts: Plaintiff was planning to build a shopping center on a piece of land adjacent to Defendant’s land; for several months, a real estate agent attempted to negotiate a sale of Defendant’s property under terms agreeable to both parties; after Plaintiff’s proposals had been rejected by Defendant b/c they were too cheap, Defendant submitted an offer and Plaintiff accepted on the same day Plaintiff was required to deposit $1,000 of the $57,500 w/real estate agent and had 120 days to examine the title and consummate the purchase; balance of price was due at the end of that period; last paragraph of deposit receipt said “subject to Coldwell obtaining leases satisfactory to the purchaser” Plaintiff paid $1,000 deposit; while securing leases, Plaintiff received notification from Defendant’s attorney that Defendant would not sell her land under the terms contained in the deposit receipt; Plaintiff offered to pay balance and Defendant failed to give deed Issue(s): Contracts for the sale of real estate consideration Holding: Judgment entered for Defendant reversed Analysis: Agreement doesn’t mention necessity to notify Defendant if leases not obtained; provision making agreement “subject to” Plaintiff’s securing satisfactory leases doesn’t necessarily constitute a condition to the existence of a contract; The whole purchase receipt and the clause must be read as merely making Plaintiff’s performance dependent on obtaining of satisfactory leases For contract to be binding, both parties must have assumed some legal obligation; w/out mutuality of obligation, the agreement lacks consideration 2 Primary Categories for “satisfaction” clauses—(1) the standard of a reasonable person is used in determining whether satisfaction has been received or (2) factors involving fancy, taste, or judgment Must be dissatisfied w/the performance, as a performance of the contract, and his dissatisfaction must be genuine The standard as to the satisfaction of a reasonable person doesn’t apply where the performance involved a matter dependent on judgment; by saying this court implied there is no other judgment; in cases which have upheld satisfaction clauses dependent on the exercise of judgment, criterion becomes good faith