Irving v. Town of Clinton

Supreme Judicial Court of Maine · 1998 · Contracts

Contractscondition precedentcontingent contractvoter approvalmunicipal contractsummary judgmentnonoccurrencedischarge of duty

Facts

Irving and a majority of the Town's selectmen signed a "Snow Plowing and Road Sanding Contract" under which Irving would maintain the Town's roads from October 1996 to May 1997 for $107,723.96. Paragraph 13 stated that the contract was contingent upon voter approval at the June 25, 1996 town meeting. At that meeting, voters considered Article 11 appropriating funds for the Highway Department, and after an amendment reduced the snow removal line item from $107,860 to $99,999, the article passed as amended. The Town then offered Irving the contract at the reduced amount, and Irving refused and sued for breach.

Issue

When a written contract expressly states that it is contingent on voter approval, is the Town bound to perform when the voters approve only a reduced appropriation rather than the contract as written? More specifically, does failure of that stated contingency discharge the Town's duty under the contract?

Rule

If a contract is expressly contingent on the occurrence of a stated condition precedent, the nonoccurrence of that condition discharges the parties from their duties under the contract. When voter approval is the stated contingency, approval of materially different funding rather than approval of the contract as written does not satisfy the condition.

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One of 10 multiple-choice questions for this case. Pick an answer to see why.

In Bangor, Maine, Lena Ortiz signed a one-year landscaping agreement with the Town of Maple Crossing for $84,000. The written agreement stated, "This agreement is contingent upon approval by town voters at the April budget meeting." At the meeting, voters approved the landscaping line item exactly as proposed.

If the town later refuses to let Ortiz perform and refuses payment, which is the strongest analysis?

Explanation. The majority opinion applies the rule that when a contract is expressly contingent on a stated condition precedent, the parties' duties arise only if that condition occurs. Here, unlike a case where approval did not occur as written, the voters approved the arrangement exactly as required, so the stated condition was satisfied rather than failing.