Opinion ID: 794123
Heading Depth: 2
Heading Rank: 1

Heading: Breach of of the Addendum

Text: 11 Cordry devotes much of his argument to the meaning of the contract term Base NADA wholesale value. No matter how that term is defined, however, Vanderbilt did not breach ¶ 1.2 of the addendum by lending less than the full 60 or 65 percent of NADA value on the used homes. Parties are generally free to contract as they wish, and courts will enforce contracts according to their plain meaning, unless induced by fraud, duress, or undue influence. Util. Serv. & Maint., Inc. v. Noranda Aluminum, Inc., 163 S.W.3d 910, 913 (Mo. banc 2005). The express terms in ¶ 1.2 of the addendum were that DFS, in its sole discretion, may loan to [Cordry] an amount up to  60 or 65 percent of the Base NADA wholesale value. (Emphasis added). By its plain language, the addendum provided the finance company discretion to lend less than 60 or 65 percent of the NADA value on any given used home. 12 Cordry suggests that Vanderbilt's discretion under ¶ 1.2 of the addendum to lend any amount less than 60 or 65 percent for any used home, including lending nothing if it chooses, renders the contract illusory. The phrase `illusory promise' means `words in promissory form that promise nothing.' An illusory promise is not a promise at all and cannot act as consideration; therefore no contract is formed. Magruder Quarry & Co. v. Briscoe, 83 S.W.3d 647, 650 (Mo.Ct.App.2002) (quoting Corbin on Contracts § 5.28). However, it is well-settled that an implied obligation to use good faith is enough to avoid finding a contract null and void due to an illusory promise. Id. at 650-51. For example, Magruder Quarry held that a quarry lease was not void as illusory, even though the lessees had the discretion not to mine any rock at all, because the lessees were under an implied covenant of good faith and fair dealing to use reasonable efforts to mine rock. Id. at 650-52. Similarly, in the instant case Vanderbilt was bound by the implied covenant of good faith and fair dealing to use reasonable efforts to finance used homes for Cordry, as the covenant is implied in all contracts in Missouri. Id. at 651. Therefore, the discretion granted by ¶ 1.2 does not render the agreement illusory. 13 Cordry next argues that DFS's practice of lending the full 60 or 65 percent of the NADA retail value for each used home it financed became part of the financing agreement and bound Vanderbilt to lend that amount after the assignment. First, Cordry asserts that the individual Statements of Transaction for each used mobile home financed by DFS must be read as part of the financing agreement assigned to Vanderbilt. The Statements of Transaction are described in ¶ 2 of the financing agreement: 14 [Cordry] and DFS agree that certain financial terms of any advance made by DFS under this Agreement . . . are not set forth herein because such terms depend, in part, upon the availability of Vendor discounts, payment terms or other incentives, prevailing economic conditions, DFS' floorplanning volume with [Cordry] and with [Cordry's] Vendors, and other economic factors which may vary over time. [Cordry] and DFS further agree that it is therefore in their mutual best interest to set forth in this Agreement only the general terms of [Cordry's] financing arrangement with DFS. Upon agreeing to finance a particular item of inventory for [Cordry], DFS will send [Cordry] a Statement of Transaction identifying such inventory and the applicable financial terms. 15 This contractual language demonstrates that the parties did not intend the agreed financing levels for individual mobile homes, as set forth in each Statement of Transaction, to bind the finance company to offer, or the retailer to accept, the same financing level for future individual mobile homes. Furthermore, although ¶ 1.2 of the addendum adds some specificity to the financing terms for used mobile homes, ¶ 1.3 of the addendum reiterates that [a]pplicable financial terms . . . will be set forth on the Statement of Transaction and ¶ 2 of the addendum states that the addendum modifies no other terms of the agreement. The only reasonable conclusion is that, under ¶ 2 of the financing agreement, the Statements of Transaction memorializing DFS's decision to lend the full 60 or 65 percent of the NADA retail value for the used homes it already had financed would not have bound DFS to continue to lend the same amount for future used homes. Consequently, Vanderbilt, which steps into the shoes of DFS as an assignee, also cannot be so bound. See Carlund Corp. v. Crown Ctr. Redev., 849 S.W.2d 647, 651 (Mo.Ct.App.1993). 16 Similarly, Cordry argues that DFS's practice of lending the full 60 or 65 percent of the NADA retail value for each used home it financed is a course of dealing that modified the agreement and bound Vanderbilt after the assignment. This argument also fails. Paragraph 25 of the financing agreement expressly states that the terms of the agreement cannot be modified by any non-compliant course of dealing between the parties. Under Missouri law, a written agreement cannot be modified by the later conduct of the parties unless the evidence shows mutual assent and additional consideration for the modification. 4 Peterson v. Continental Boiler Works, Inc., 783 S.W.2d 896, 901-02 (Mo. banc 1990). Cordry presents no evidence that he provided consideration to DFS or Vanderbilt in return for a relinquishment of their discretion to lend less than 60 or 65 percent. We conclude that the course of dealing between DFS and Cordry did not alter the terms of the agreement. 17