Court Opinion

ID: 9624687
Source: CourtListenerOpinion
Date Created: 2023-08-22 07:13:38.027625+00
Date Added: 2024-06-11T18:05:52.725863
License: Public Domain

Deen, Judge,
concurring specially. Commercial Mortgage &c. Corp. v. Greenwich Savings Bank, 112 Ga. App. 388, supra, states: "Contracts requiring that one party’s performance be 'satisfactory’ or 'acceptable’ to the other party in certain specified respects, are not illusory in character or void for lack of mutuality, but impose upon the party to be satisfied positive obligations conditioned upon his satisfaction in the exercise of an honest judgment.” 5 Williston on Contracts (3d Ed.) § 675A is quoted in part: "Since, however, such a promise is generally considered as requiring a *79performance which shall be satisfactory to him in the exercise of an honest judgment, such contracts have been almost universally upheld.” Cases are grouped which held contracts had mutuality although conditioning a lease renewal as being satisfactory to the owner, a land sale on the buyer’s satisfaction with the condition of the property, a construction contract on the work being done to the owner’s satisfaction and a sale of goods subject to the satisfaction of the buyer. The Commercial Mortgage case involved a sale to persons “whose credit rating shall be satisfactory to” and title insurance “written by companies acceptable to” the plaintiff. The fact that such a contract is not void and does not lack mutuality, although it may be unenforceable where it takes the form of a condition precedent, is shown by Stribling v. Ailion, 223 Ga. 662, 663 (157 SE2d 427): "Where in a contract one party agrees to perform to the satisfaction of the other party in a matter involving judgment, the latter shall be the sole judge of his satisfaction.” The case then cites Atlanta Realty Co. v. Campion, 94 Ga. App. 136 (2) (93 SE2d 781) where it was said: "Where one contracting party agrees to perform services to the satisfaction of or satisfactory to the other party, compliance with the contract is not shown unless it appears that the thing done or the article furnished does in fact satisfy the other party. An exception to this rule, of course, is where dissatisfaction is feigned merely for the purpose of avoiding the contract. That has been held not' to be. dissatisfaction, but fraud.”
Thus it appears that a contract is not void or lacking in mutuality because it specifies that in connection therewith something must be done which one of the parties may accept or reject in his discretion. The contract is valid; the exercise of an honest judgment is the question at issue. Further, the discretionary acceptance may be phrased in either of two ways — as a condition precedent, in which case no rights arise on either side until the judgment is exercised one way or the other, or as a condition subsequent, in which case the contract is valid until the contracting party *80exercises his discretion to annul it, the burden then being on the opposite party to show that the discretion was not fairly exercised if he wishes to insist on enforcement.
The present case is a good example of a discretionary stipulation contained in a condition subsequent: the sale is contingent upon subject property being served by the necessary storm and sanitary sewers "at a cost to purchaser which purchaser considers reasonable and economically feasible. If it cannot be then this contract shall be null and void.” Obviously, all parties considered the contract viable, subject to its cancellation if, in the opinion of the purchaser honestly exercised, sewer connections were found not to be economically feasible.
The letter relied on as an anticipatory breach states: "My cost studies indicate that it would not be economically feasible to service this subject property with necessary storm and sanitary sewers . . . due solely to the fact that sewer service from Piedmont Avenue cannot be obtained . . . as it is not possible to attach the sewer line onto the sewer line serving Piedmont Avenue. Any other sewer service would involve an expenditure which would not be justified for this property.”
I think it is extremely important to keep a clear distinction between contracts which are void because lacking in mutuality and contracts which are valid although they may become unenforceable upon the failure of some contingency. All sorts of rights may arise under such contracts other than those relating particularly to the contingency. I can make no rational distinction between, say, a provision for installing sewers at a price satisfactory to the purchaser, which would be valid under the Commercial Mortgage case, 112 Ga. App. 388, supra, and a provision that the property be served by sewers at a price "which purchaser considers to be reasonable and economically feasible.” If anything, it seems to me that the latter phraseology is more definite than the former.
I therefore disagree with the second division of the opinion, holding the contract void for lack of mutuality. The *81cited cases (Wehunt v. Pritchett, 208 Ga. 441 and F. & C. Investment Co. v. Jones, 210 Ga. 635, both supra) are not in point. There the contracts did not become effective until the purchaser did some unrelated act — in one instance, sell another house which he owned; and in the other obtain a certain described mortgage loan, there being no duty cast on him to initiate either act. In those cases the contracts simply never came into existence because a stated condition precedent failed to occur.
However, on this motion for summary judgment I think the appellee prima facie established (a) that he elected to rescind the contract because in his opinion the cost of sewer installation was not satisfactory to him because not economically feasible, and (b) a logical, objective reason for his having arrived at this opinion. Plaintiffs offer no evidence either that the defendant purchaser did not exercise his discretion in the matter or that it was arbitrarily and unfairly exercised so as to be fraudulent. For this reason alone I concur in the judgment.