Opinion ID: 1959668
Heading Depth: 1
Heading Rank: 3

Heading: Waiver of Conditions Precedent

Text: In their petitions, Matos and Mt. Hope contended that the trial justice erred when he decided that the tax abatement was a condition precedent that could not be unilaterally waived. It is well established, and this Court has recently affirmed in Yates v. Hill, 761 A.2d 677, 680 (R.I.2000) (per curiam), that a party may waive a condition precedent if the condition has been included for the benefit of the waiving party. In Yates, the conditions at issue benefited the buyer who requested a closing date and indicated that she was ready and willing to consummate the sale upon the seller's refusal to proceed with the sale of her residence. We held in that case that the filing of suit for specific performance    implicitly waive[s] any of the sale conditions that were for the benefit of the party seeking such relief. Id. See also Jones v. United States, 96 U.S. (6 Otto) 24, 28, 24 L.Ed. 644, 646 (1878) (Conditions precedent may doubtless be waived by the party in whose favor they are made.). The purchase and sales agreements signed by the parties in the instant case indicated that the tax abatements were conditions that benefited petitioners. Matos's counsel and Mt. Hope, which was not represented by legal counsel until the commencement of litigation, urged the receiver to obtain such abatements. The petitioners and the receiver also extended the closing date several times to permit the receiver toaddress the town council on this issue. The trial justice found that the purchasers by threats not to close on the agreement, unless the taxes were abated or discharged, were thereby imposing a condition precedent on the closing of the agreement. We are of the opinion, however, that petitioners were entitled to the benefit of their bargain and that their letters did not constitute an amendment to their initial agreements, notwithstanding the statement in Matos's letter of a condition precedent. Furthermore, although petitioners were not obligated to consummate the purchase if the outstanding real estate taxes had not been discharged, the original purchase and sale agreements provided that the Purchaser, at the Purchaser's option, may waive any defects and take such title to the Real Estate as the Receiver is able to convey. When the receiver failed to negotiate the tax abatement, petitioners had the right to move forward without the benefit of tax relief, given their express waiver of that condition by informing the receiver that they were ready, willing, and able to consummate the purchase immediately. The receiver in this case argued that the town's abatement of the property taxes could not be waived by petitioners because the abatement did not solely benefit petitioners. The trial justice made no such finding when he determined that the condition precedent could not be waived unilaterally, but rather based his decision on the fact that the parties mutually agreed to a condition precedent for the consummation for each of the sales agreements. By the time petitioners indicated their willingness to proceed with the purchase, substantially more appealing offers from third parties had been submitted to the receiver, and the receiver reasoned that his fiduciary duty towards the town as the main creditor of Buttonwood obligated him to attempt to maximize the repayment of debt. For the reasons stated below, we are unpersuaded by this argument and hold that the trial justice erred in interpreting reference to a condition precedent as an indication of a bilateral agreement, when in fact the petitioner-buyers here were entitled to avail themselves of a waiver.