Court Opinion

ID: 9531753
Source: CourtListenerOpinion
Date Created: 2023-08-07 04:14:18.631376+00
Date Added: 2024-06-11T13:28:34.507731
License: Public Domain

PRESIDING JUSTICE JIGANTI, dissenting: The parties agree that the issue is whether the two provisions of the contract cited in the majority opinion created conditions precedent. The majority concludes that in fact these provisions did create conditions precedent. Case law and the Restatement (Second) of Contracts lead me to a contrary conclusion. It is a well-documented common law rule that conditions precedent are not favored by the courts and contracts will not be construed as having conditions precedent unless required to do so by plain, unambiguous language. (Christofferson v. Halliburton Co. (5th Cir. 1980), 617 F.2d 403; United States v. Schaeffer (9th Cir. 1963), 319 F.2d 907, cert, denied (1964), 376 U.S. 943, 11 L. Ed. 2d 767, 84 S. Ct. 798; Shackleton v. Food Machinery & Chemical Corp. (E.D. Ill. 1958), 166 F. Supp. 636, ajfd in part, rev’d in part (7th Cir. 1960), 279 F.2d 919; Department of Public Works & Buildings v. Porter (1927), 327 Ill. 28, 158 N.E.2d 366; McAtee v. Wes-Lee Corp. (Okla. 1977), 566 P.2d 442; Cheyenne Dodge, Inc. v. Reynolds & Reynolds Co. (Wyo. 1980), 613 P.2d 1234; 17A C.J.S. Contracts sec. 338 (1963); 12A Ill. L. & Prac. Contracts sec. 231 (1983). The Restatement (Second) of Contracts sec. 227 (1981), “Standards of Preference with Regard to Conditions,” states: “(1) In resolving doubts as to whether an event is made a condition of an obligor’s duty, and as to the nature of such an event, an interpretation is preferred that will reduce the obligee’s risk of forfeiture, unless the event is within the obligee’s control or the circumstances indicate that he has assumed the risk.” (Emphasis added.) (Restatement (Second) of Contracts sec. 227 (1981).) The comments to the above section state that the word “forfeiture” is used to refer to the denial of compensation that results in such a case. (Restatement (Second) of Contracts sec. 227, comment b, at 175 (1981).) The very first illustration for this section of the Restatement is a virtual reiteration of the facts in the instant case. The illustration states the following facts: A general contractor contracted with a subcontractor for work on a construction project. The contract contained the provision that the subcontractor would receive the contract price, “no part of which shall be due until five days after Owner shall have paid Contractor therefor.” The illustration further states that after the work was done by the subcontractor the owner became insolvent and failed to pay the general contractor. The Restatement’s position is that this is not an example of a condition precedent and that it was therefore the duty of the general contractor to pay the subcontractor after a reasonable time. Restatement (Second) of Contracts sec. 227, comment b, at 176 (1981). The illustration in the Restatement was taken from the case of Thos. J. Dyer Co. v. Bishop International Engineering Co. (6th Cir. 1962), 303 F.2d 655. A number of other States have addressed this issue and have come to the same conclusion as did the court in Dyer. (See Trinity Universal Insurance Co. v. Smithwick (8th Cir. 1955), 222 F.2d 16, cert, denied (1955), 350 U.S. 837, 100 L. Ed. 747, 76 S. Ct. 74; Moore v. Continental Casualty Co. (W.D. Okla 1973), 366 F. Supp. 954; Darrell T. Stuart Contractor v. Bridges (1965), 2 Ariz. App. 63, 406 R2d 413; Peacock Construction Co. v. Modern Air Conditioning, Inc. (Fla. App. 1976), 339 So. 2d 294, aff’d (Fla. 1977), 353 So. 2d 840; A. J. Wolfe Co. v. Baltimore Contractors, Inc. (1969), 355 Mass. 361, 244 N.E.2d 717; Eastern Heavy Constructors, Inc. v. Fox (1963) , 231 Md. 15, 188 A.2d 286; Howard-Green Electrical Co. v. Chaney & James Construction Co. (1971), 12 N.C. App. 63, 182 S.E.2d 601; Sturdy Concrete Corp. v. NAB Construction Corp. (1978), 65 App. Div. 2d 262, 411 N.Y.S.2d 637, appeal dismissed (1979), 46 N.Y.2d 938, 415 N.Y.S.2d 212, 388 N.E.2d 349; Mignot v. Parkhill (1964) , 237 Ore. 450, 391 P.2d 755; Elk & Jacobs Drywall v. Town Contractors, Inc. (1976), 267 S.C. 412, 229 S.E.2d 260. This series of cases, as well as the Restatement (Second) of Contracts, mandates a finding consistent with their conclusions. The rationale as provided by the above sources highlights the need to critically construe contracts against the finding of conditions precedent. Moreover, the facts in the illustration in the Restatement and those in the above cases closely track the facts in the case at bar and as such provide a convincing basis with which to find that there is no condition precedent in the instant contract. Accordingly, for the foregoing reasons I dissent.