Court Opinion

ID: 9765108
Source: CourtListenerOpinion
Date Created: 2023-08-29 03:51:00.898599+00
Date Added: 2024-06-11T07:30:05.237059
License: Public Domain

ON MOTION FOR REHEARING
In their motion for rehearing sellers strenuously contend that, as the earnest money was not paid in cash or delivered into their exclusive control, there was never a binding contract because “no consideration passed.” There is a difference, however, between the consideration of the sale (sales price of the land) and the consideration for the contract. It is not necessary that the sales price or any part of it be paid at the time the contract of sale is executed, in order for the contract to be binding and to be supported by consideration. The mutual promises—one by the seller to sell and one by the buyer to buy and pay for the land—are sufficient consideration to make the contract binding. 17 C.J.S. Contracts § 97, p. 781; 91 C.J.S. Vendor and Purchaser § 46, p. 896, and cases there cited. As stated by the Supreme Court of Missouri in Ragan v. Schreffler, 306 S.W.2d 494 (1957);
“ . . . The contention that the agreement . . . and the contract . . . were not supported by any consideration actually paid by plaintiffs at the time the ... instruments were completed, are ruled adversely to defendants-appellants. It is the recognized general rule that a promise by one party to a contract is a sufficient consideration for a promise by the other party. If, therefore, there is a promise on the part of a purchaser to buy and pay the purchase price, this itself is a sufficient consideration for the promise of a vendor to sell and convey.”
*228The contention raised by sellers on this point was urged and rejected in the case of Craigmile v. Sorenson, 239 Minn. 383, 58 N.W.2d 865, where the Supreme Court of Minnesota said:
“The consideration essential to the validity of an agreement for the purchase or sale of land need not be paid at the time of making the agreement. The agreement of the vendee to pay in the future is sufficient consideration for the promise of the vendor to convey.”
It is only when the provision for a down payment or an earnest money deposit is so material to the complete agreement that it constitutes a condition precedent, that the failure to comply therewith will prevent the agreement from ever becoming a binding contract.
The consideration for the contract here was not the earnest money payment. The contract was a bilateral contract, the consideration for such being the mutual promises of the parties, one to sell and the other to buy the property. The motion for rehearing is respectfully overruled.