Opinion ID: 2552490
Heading Depth: 1
Heading Rank: 6

Heading: Existence of a Binding Contract

Text: [¶ 15] Whitlock claims that when the JPB accepted its bid and awarded Whitlock the contract, a binding contract existed between itself and the JPB. Whitlock characterizes the JPB's acceptance of its bid as an unconditional acceptance of a conditional promise. Once a binding contract existed, Whitlock claims, the JPB had an implied contractual duty to use good faith efforts to secure the concurrence of the funding agencies. The JPB breached this duty, Whitlock contends, by failing to use good faith to obtain agency concurrence. [¶ 16] In contrast, the JPB argues (and the district court held) that a binding and enforceable contract was not formed between the parties because the funding agencies did not concur in the award to Whitlock and, therefore, the requisite contingency to a binding contract never occurred. Citing Mad River Boat Trips, Inc. v. Jackson Hole Whitewater, Inc., 803 P.2d 366, 368 (Wyo. 1990) and Robert W. Anderson Housewrecking & Excavating, Inc. v. Board of Trustees, Sch. Dist. No. 25, 681 P.2d 1326, 1331 (Wyo. 1984), the JPB characterizes the required concurrence as a condition precedent to the formation of a binding contract. Because there was no binding contract, the JPB claims, there was no implied covenant of good faith and fair dealing. [¶ 17] In Robert W. Anderson Housewrecking, we were presented with facts similar to those presented in this case. The school board sought bids for demolition of a school. Gillingham Construction was the low bidder. Anderson was the next low bidder. Before the school board met to review the bids, Gillingham withdrew its bid. At the next board meeting, the board passed a resolution to accept Anderson's bid with the condition that a citizens' group be given time to find another use for the building. After the meeting, Gillingham renewed its bid. The school board accepted Gillingham's bid and advised Anderson that the contract had been awarded to Gillingham. [¶ 18] We were asked to determine whether acceptance of Anderson's bid by the school board created a binding contract subject to a condition precedent, or an agreement to make a contract in the future. We held that the school board resolution to award the project to Anderson created a binding contract with Anderson once he had notice of the award. We said that the contract was created with the condition precedent that if the citizens' group found another use for the school, the school board would not be bound by the contract. Because the condition never occurred (the citizens' group never found another use), we held that the school board was bound by its contract with Anderson and was not free to revoke the contract and award the project to Gillingham. Implicit in our holding was the conclusion that if the condition had occurred, the board would not have been bound by its contract with Anderson. [¶ 19] We were faced with similar facts in Mad River Boat Trips, Inc. v. Jackson Hole Whitewater, Inc., 803 P.2d 366. The parties entered into a contract for the sale of two whitewater rafts and special use permits issued by the Forest Service. The contract provided that it was contingent upon the consent of the Forest Service to an assignment in trust. The Forest Service did not consent to the assignment in trust, and Mad River revoked the contract. Jackson Hole Whitewater, Inc. filed a complaint claiming breach of contract. We held that performance under the contract was contingent upon the consent of the Forest Service; and when the contingency did not occur, the parties were excused from performance. [¶ 20] Anderson and Mad River are controlling as to the result in this case. The project documents provided to Whitlock clearly stated that concurrence by FmHA or its designee was required before any contract award became effective. Whitlock concedes that it was aware of this requirement when it submitted a bid on the project. Although a contract existed once Whitlock was informed the project was his, performance under the contract never became due because the contingencyagency concurrencenever occurred. When the contingency failed to occur, the parties were relieved of performing under the contract. [¶ 21] The difference between our holding in this case and the holding in Anderson is that we do not utilize the condition precedent language relied upon by the court in Anderson. Rather, we adopt the terminology of the Restatement, Second, Contracts § 224 which references simply condition and defines it as an event, not certain to occur, which must occur, unless its non-occurrence is excused, before performance under a contract becomes due. In discarding the phrase condition precedent, we are persuaded that the term condition is simpler, no less accurate, and less susceptible to confusion and misinterpretation. See discussion at pp. 11-14, 8 Corbin on Contracts, § 30.7 (1999). [¶ 22] We hold that a binding contract existed between the partiesthere was an unconditional acceptance of a conditional promise. However, the contract was subject to a condition which had to occur before performance under the contract became due: that is, concurrence by the FmHA or its designee. Because the contingency did not occur, performance under the contract did not become due.