Fowler v. Weiss

546 A.2d 321, 15 Conn. App. 690, 1988 Conn. App. LEXIS 318
Connecticut Appellate Court·Decided August 30, 1988·No. 5717·Published·Cited by 29 cases

Opinion

Daly, J.

The defendants appeal from the judgment rendered, after a trial to the court, awarding the plaintiffs specific performance of a binder of sale1 as an enforceable contract for the sale of real estate.

[691] The defendants claim that the trial court erred (1) in finding that the binder of sale agreement signed by the parties created a final enforceable agreement, (2) in concluding that the plaintiffs had sustained their burden of proof with regard to their ability to perform their obligation under the binder of sale, and (3) in granting specific performance. We find error.

The following facts are pertinent to this appeal. On August 18,1985, the parties executed a binder of sale agreement whereby the defendants agreed to sell their home, located at 6 Hazel Street, Norwalk, to the plaintiffs for $179,000. A down payment in the amount of $1790 was acknowledged with a superseding “contract of sale” to be signed on or before August 30, 1985, at which time an additional $16,110 would be paid. The sale was contingent upon the plaintiffs conducting a termite inspection and securing a first mortgage of not less than $139,000 at the then current interest rate for a term of thirty years before August 25, 1985. In addition, the binder provided that the closing was scheduled for October 15. The defendants expected to move to the Boston area due to a business relocation but this did not materialize. On or about August 28, 1985, the [692] defendants notified their broker regarding this change of plans and their intent to withdraw from the binder agreement. At that particular time, the defendants returned the 1 percent binder deposit.

At trial, the plaintiffs testified that they applied for a $139,000 mortgage from the Gateway Bank and, on September 4, the bank sent them a written mortgage commitment. The plaintiffs, however, never signed the commitment, paid the required fee or provided the bank with the requested copy of the contract of sale. After making further inquiries concerning the house, the plaintiffs purchased another home in Norwalk.

The trial court concluded that the binder of sale was a legally enforceable agreement and that the plaintiffs were ready, willing and able to purchase the defendants’ house. The trial court ordered specific performance.

In the first claim of error, the defendants argue that this is not a case that can be determined by reference to the statute of frauds.2 The defendants contend that the parties intended the binder to serve as documentation of their intent to enter into an enforceable contract and a statement of information for the attorneys who would draft the document for the contract of sale.

The decisive question before us is whether the binder of sale was a binding contract or merely an informal writing documenting an intention to create a binding contract. In concluding that the binder of sale was not an enforceable contract, we examined the plain meaning of the contract in conjunction with the intent of the parties. As our Supreme Court has stated, “[t]he court will not torture words to import ambiguity where ordinary meaning leaves no room for ambiguity. Downs v. [693] National Casualty Co., 146 Conn. 490, 494, 152 A.2d 316 [1959]. The circumstances surrounding the making of the contract, the purposes which the parties sought to accomplish and their motives cannot prove an intent contrary to the plain meaning of the language used. Connecticut Co. v. Division 425, 147 Conn. 608, 616-17, 164 A.2d 413 [1960]; see 3 Corbin, Contracts § 542; 4 Williston, Contracts (3d Ed.) § 609.” Zullo v. Smith, 179 Conn. 596, 601, 427 A.2d 409 (1980).

Whether the parties intended legally to bind themselves prior to the execution of a formal contract is to be determined from (1) the language used, (2) the circumstances surrounding the transaction, and (3) the purpose that they sought to accomplish. Klein v. Chatfield, 166 Conn. 76, 80, 347 A.2d 58 (1974). A consideration of these factors enables a court to determine if the informal contract, in this case the binder, is enforceable or merely an intention to negotiate a contract in the future. See Johnson v. Star Iron & Steel Co., 9 Wash. App. 202, 206, 511 P.2d 1370 (1973).

An examination of the binder of sale reveals that, by its own terms, the parties were not bound until a contract of sale was drawn. The binder specifically stated that a “CONTRACT OF SALE is to be signed on or before August 30,1985.” This contract of sale, unlike the binder, was to be a formal agreement between the parties. Moreover, it contemplated a large payment of $16,110 “on signing the superseding contract.” The plain meaning of supersede3 is “[t]o make obsolete, inferior, or outmoded ... to make void . . . annul, override ... to make superfluous or unnecessary . . . to take the place of . . . to take precedence over . . . . ” Webster, Third New International Dictionary. Applying the aforesaid definition of superseding we find [694] that the mere execution of the binder by the parties did not create an enforceable contract. “It was essential to the creation of a contract that a formal written agreement should be executed. This formal written agreement was a condition precedent to the completion of a contract, and until such formal written agreement was executed the parties were still in the stage of negotiations for a contract and either party could withdraw from the negotiations.” Atlantic Terra Cotta Co. v. Chesapeake Terra Cotta Co., 96 Conn. 88, 101, 113 A.2d 156 (1921).

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Fowler v. Weiss, 546 A.2d 321, 15 Conn. App. 690, 1988 Conn. App. LEXIS 318 (Colo. Ct. App. 1988).

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