Omni Grp. v. Seattle-First Nat'l Bank

32 Wash. App. 22, 645 P.2d 727 (1982)



A promise for a promise is sufficient consideration to support a contract. If, however, a promise is illusory, there is no consideration and therefore no enforceable contract between the parties. Consequently, a party cannot create an enforceable contract by waiving the condition which renders his promise illusory. But that a promise given for a promise is dependent upon a condition does not necessarily render it illusory or affect its validity as consideration. 


The owners had listed their property for sale with a real estate broker. The broker subsequently offered the property to the developer. The parties signed an earnest money agreement subject to an engineer's satisfactory feasibility report. When the developer sought to enforce the agreement for the purchase of realty owned by the owners in court, the trial court determined that by making its obligations subject to a satisfactory engineer's feasibility report, the developer rendered its promise to buy the property illusory. On appeal, the court reversed and concluded that the developer's promise was not illusory.


Was the developer's promise illusory?




The court remanded with instructions to enter a decree ordering specific performance of the earnest money agreement. It found that the earnest money agreement created two conditions precedent to the developer's duty to buy the property. It had to receive the report and it had to find it satisfactory. The court found that the standard of evaluating the developer's satisfaction was good faith. The developer could cancel the contract only if it was not satisfactory, otherwise it had to give notice and purchase the property. Accordingly, the promise was not illusory and the earnest money agreement was supported by consideration. That the owners' agents failed to convey certain additional terms did not affect the validity of the agreement.


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