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Jones Assocs. v. Eastside Props. - 41 Wash. App. 462, 704 P.2d 681 (1985)

Rule:

Whether a provision in a contract is a condition, the nonfulfillment of which excuses performance, depends upon the intent of the parties, to be ascertained from a fair and reasonable construction of the language used in the light of all the surrounding circumstances.

Facts:

In early 1977 Jones Associates, an engineering, consulting, and surveying firm, and Eastside Properties, a real estate development corporation, entered into a professional services agreement. Under the contract for a $17,480 fixed fee, including short plat application fees, Jones Associates was to provide a feasibility study, master plan, nine record surveys, and nine short plats for Eastside's 180-acre land parcel. In May 1978 Jones Associates submitted Eastside's short plat application to the King County Building and Land Development Division, which, in July 1978, gave its preliminary approval with numerous conditions attached. Eastside unsuccessfully appealed the conditions imposed. Jones Associates claims that it performed all required services under the original contract and the change order. According to Eastside Properties, however, two conditions precedent to payment were not met: the original and the updated feasibility studies were not proven to be satisfactory to Eastside, and King County final plat approval was not obtained. Eastside paid $15,000 to Jones Associates in April 1980. In March 1981 Jones Associates brought a money due action against Eastside. The trial court granted Eastside’s motion to dismiss the complaint. According to the trial court, its dismissal was based upon its interpretation of the unambiguous contract language that obtaining county approval was a condition precedent to contractual payment, which condition had not been met. Jones Associates' reconsideration motion was denied, and the present appeal followed.

Issue:

Was the provision in the contract, which required Jones Associates to obtain county approval, a condition precedent to contractual payment, thereby warranting the dismissal of the money due action? 

Answer:

No.

Conclusion:

The Court held that the provision was a promise rather than a condition precedent; thus dismissing the action was error. The Court examined the entire contract, the circumstances surrounding the contract's formation, the parties' subsequent conduct, and the reasonableness of the parties' respective interpretations. The Court then ruled that the parties intended Jones Associates’ assumption of responsibility for obtaining county approval to be a duty under the contract but not a condition precedent to payment. Hence, the Court remanded the case for determination of whether either party prevented the other from obtaining the full benefit of performance, and to recalculate damages.

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