Opinion ID: 1792682
Heading Depth: 2
Heading Rank: 4

Heading: Current Status of Contract

Text: In a real estate transaction, the law contemplates that each party will only relinquish their tight grip on their money or deed once they have their other hand firmly planted on the other party's money or deed; therefore, the law generally requires simultaneous performance. Braig v. Frye, 199 Iowa 184, 189, 199 N.W. 977, 979 (1924); see also 13 Richard A. Lord, Williston on Contracts § 38:8, at 407 (4th ed. 2000) [hereinafter Williston on Contracts ] (stating the obligation of each party in a real estate contract is subject to the condition precedent that the other party either perform, or make an absolute or conditional tender of performance). The penalty provision is the only language in either the settlement agreement or real estate contract which could possibly change the presumption of simultaneous performance. As discussed above, the penalty provision required the Estate to first tender a marketable title to the subject property before the penalty provision became applicable. At best, this means the Estate had to perform first by tendering marketable title to the subject property. Even if we assume, arguendo, Passehls failed to tender proper performance on March 24 and April 1, we would still conclude neither party tendered proper performance on either date. If both parties fail to perform their mutual and simultaneous obligations under a contract, then neither is in default. Braig, 199 Iowa at 189, 199 N.W. at 979; Wright v. Swigart, 172 Iowa 743, 746, 154 N.W. 938, 939 (1915); Waters v. Pearson, 163 Iowa 391, 403, 144 N.W. 1026, 1031 (1914); see also 13 Williston on Contracts § 38:8, at 407 ([b]efore either party can sue on a [real estate] contract, that party must first put the other party in default by tendering or offering to tender performance). Without a default or breach by either party, the penalty provision becomes inapplicable and the contract continues as binding on both parties. See Braig, 199 Iowa at 189, 199 N.W. at 979.