Hedges v. Hurd

Hill, J.

(concurring)—I concur in the result of the majority opinion, and I agree with the majority that damages can be awarded under certain circumstances where a contract could not be specifically enforced.

It is appellant’s contention that an “Earnest Money Receipt and Agreement,” signed by all the parties and (a) identifying the seller and the purchaser, (b) adequately describing the property, (c) stating the purchase price and the manner in which payment thereof is to be made, (d) providing that taxes, rent, insurance, interest, and water and other utility charges are to be prorated as of the closing *689date, and (e) fixing the closing date and the date on which the purchaser is to have possession, is, as between the seller and the purchaser named therein, nugatory and illusory, inasmuch as it is contemplated that the parties are to enter into an executory real-estate contract and they may not be able to agree on the terms thereof. Quite bluntly stated, appellant’s contention is that such an earnest-money receipt and agreement does no more than evidence that the real-estate broker has earned his commission, and that the seller can be compelled neither to specifically perform the agreement nor to pay damages for its breach. (If the seller is not bound by such an agreement, it is difficult to see on what theory the purchaser is bound, and all of our cases upholding the forfeiture of earnest-money payments when the purchaser has refused to complete the transaction would have to be reconsidered, and many of them overruled.)

It is my view that, as a result of such an earnest-money receipt and agreement, there is an implied agreement between the seller and the purchaser that they will negotiate in good faith the terms of the executory real-estate contract contemplated by the agreement. The terms of such executory contracts are now so generally standardized that bona fide disagreement on the terms not covered by the earnest-money receipt and agreement is quite unlikely. Appellant suggested in oral argument that she could prevent the execution of such an executory contract by insisting upon fantastic and impossible terms. In urging such terms, she would be violating her implied agreement to negotiate in good faith. In the present case, appellant refused even to attempt to negotiate the executory real-estate contract contemplated by the agreement, and thereby she breached the contract she had made by signing the earnest-money receipt and agreement. The respondents have established their damages for that breach, and the judgment in their favor should be affirmed.

Hamley, C. J., concurs with Hill, J.