A modified contract containing a term inconsistent with a term of an earlier contract between the same parties is interpreted as including an agreement to rescind the inconsistent term in the earlier contract. The modified contract is regarded as creating a new single contract consisting of so many of the terms of the prior contract as the parties have not agreed to change, in addition to the new terms on which they have agreed. Furthermore, when a contract is modified or amended by a subsequent agreement, any lawsuit to enforce the argument must be brought on the modified agreement and not on the original agreement. The interpretation of any contract is a question of law to be determined by the appellate court independently of the trial court's judgment and in accordance with general rules applicable to contract construction.
Plaintiff condominium purchasers tendered an offer to buy a specific condominium unit owned by defendants, the trustee bank and trust beneficiary. Defendant trust beneficiary accepted the offer. The parties signed a standard real estate contract form, which partly provided that if the contract was terminated without plaintiffs’ fault, the earnest money was to be returned to them. The parties signed the contract. One day prior to the scheduled closing date, plaintiffs were told the closing was delayed due to an injunction entered in defendant trust beneficiary's divorce case. To provide plaintiffs with possession, defendant trust beneficiary's attorney modified the original contract, which the parties signed. Thereafter, defendant trust beneficiary continued to refuse to close on the deal. The trial court granted plaintiffs' specific performance request and returned part of the rent they had paid. Defendants appealed. The Supreme Court of the United States affirmed the trial court's judgment.
Did the modification to the original contract between plaintiff condominium purchasers and defendant trust beneficiary mean that plaintiffs’ remedies were not limited to the return of their earnest money?
The modification to the original agreement meant plaintiff condominium purchasers’ remedies were not limited to the return of their earnest money, and the equities of the case made proper a specific performance award in their favor.