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Bell v. Elder - 782 P.2d 545 (Utah Ct. App. 1989)

Rule:

In determining the order of performance of exchanged promises, the court looks first to the contract itself, and, if no order of performance is therein specified, the court applies the common law of constructive contractual conditions. In a case where there is no express indication of the intended order for performance, the law implies a covenant and condition that the related obligations be performed concurrently.

Facts:

Plaintiff Bells contracted in 1977 to purchase 10 acres of undeveloped land from a partnership comprised of defendants sellers (Elders) for a total of $25,000. Subsequently, plaintiffs buyers brought an action to rescind the real estate contract and to recover the amounts they had paid thereunder, arguing that the sellers had breached the contract by failing to supply culinary water to the property. The trial court held that the Elders, as sellers, were merely required to be able to supply the water once the buyers (Bells) had procured a building permit. Because there was no application for the permit, the sellers were not required to provide the water.

Issue:

Can one party hold the other in breach of contract when the contract did not specify the order of performance of the exchanged promises, and the complaining party has yet to tender the performance of its concurrent obligation?

Answer:

No

Conclusion:

The appellate court affirmed, holding that because the contract did not specify the order of performance of the exchanged promises, neither party could claim a breach by the other until the party claiming the breach tendered performance of its concurrent obligation. Because the sellers were able to provide the water at all material times, they did not breach their obligation. The material findings were not clearly erroneous, and the buyers failed to perform their own obligations, which precluded recovery on their claims.

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