Mattei v. Hopper

51 Cal. 2d 119, 330 P.2d 625 (1958)

 

RULE:

To enforce a contract, consideration is required, and consideration requires the parties to be bound or any promise is illusory, not amounting to consideration.

FACTS:

Plaintiff, a real estate developer, planned to construct a shopping center adjacent to defendant landowner's property. After unsuccessful negotiations, the defendant submitted an offer, which plaintiff accepted. The parties' signed a deposit receipt form, requiring purchase within 120 days subject to obtaining leases satisfactory to the plaintiff. Plaintiff paid the deposit. Prior to the purchase date, plaintiff was notified that the defendant would no longer sell the property. Thereafter, defendant was informed that satisfactory leases had been obtained and that plaintiff had offered to pay the balance of the purchase price. Defendant failed to tender the deed as provided in the deposit receipt. Plaintiff filed an action for damages but the court ruled in favor of defendant concluding that the agreement was "illusory" and lacking in "mutuality." Plaintiff sought a review of judgment and the court reversed the decision.

ISSUE:

Was the contract illusory and lacking in mutuality of obligation?

ANSWER:

No.

CONCLUSION:

The contract here was neither illusory nor lacking in mutuality of obligation because the parties inserted a provision in their contract making plaintiff's performance dependent on his satisfaction with the leases to be obtained by him.

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