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Paul v. Rosen - 3 Ill. App. 2d 423


Since the evidence showed that the parties considered production of the new lease an essential step in the closing of the deal, the agreement was conditioned upon the buyer obtaining a new lease.


Buyer A. Kenneth Paul contracted with Sam Rosen to purchase the Rosen's retail liquor business. The written agreement stated that an inventory was to be made of the merchandise and that Paul would then retain the business receipts. The contract was to be consummated at a later date. The written agreement provided that it was contingent upon Paul’s obtaining a new five-year lease from the owner. Paul and his prospective partners went to the store twice, but Rosen refused to allow the inventory to be taken and stated that he had decided not to sell the business. Paul's deposit was returned. He then filed an action for breach of contract. After a jury trial, judgment was entered in favor of the buyer Paul. Defendant Rosen appealed.


Did the agreement lack mutuality?




The appellate court reversed the judgment, ruling that the seller Rosen was free to obtain the lease or not under the agreement. Consideration of the contract again confirmed that the obtaining of the lease was an essential prerequisite to the duties and obligations set forth in the agreement. It was the condition precedent to the effectiveness of the agreement and to each and every other provision. Under these circumstances, the entire contract was void for lack of mutuality. Since the contract was void for lack of mutuality, Rosen had no obligation to perform under it and cannot be held for an anticipatory breach.

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