La Salle National Bank v. Vega

Appellate Court of Illinois, Second District · Contracts

ContractsOffer and AcceptanceSummary JudgmentReal Estate Sale Contractsofferacceptancemode of acceptancecontract formation

Facts

La Salle's first amended complaint alleged that it and Mel Vega entered into a real estate sale contract and attached as a true and correct copy the document on which its claim was based. That document, signed by the purchaser's agent and by Mel Vega, stated that after the seller signed, it would be presented to the trust for full execution and that upon the trust's execution the contract would then be in full force. The attached copy did not bear the trust's signature. Although one witness believed he had delivered an executed trust copy to Mel Vega, no such copy was produced, and the trust's records contained no executed version or notation of trustee execution.

Issue

Whether there was any genuine issue of material fact that a contract for sale of real estate was formed between La Salle and Mel Vega when the writing stated it would be in full force only upon execution by the trust, and the copy attached to La Salle's verified complaint was not signed by the trust.

Rule

Contract formation requires an offer, an acceptance, and consideration. An offeror may prescribe the exclusive mode of acceptance, and when a writing provides that it will be in full force only upon execution by a specified party, no contract is formed unless that party executes the writing; no other mode of acceptance will suffice. In addition, a party's verified pleading and attached exhibit may constitute a judicial admission that withdraws contrary factual assertions from dispute.

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

In Denver, Nora Kim sent Elias Romero a drafted agreement for the sale of a vacant lot. The document stated: "After seller signs and returns this agreement, it shall be submitted to buyer's investment committee for final execution, and only upon that execution shall this agreement be in full force." Elias signed and returned it, but the committee never signed.

If Nora sues for specific performance, which is the strongest argument that no contract was formed?

Explanation. When a writing states that it will be in full force only upon execution by a specified party, that specified execution is the required mode of acceptance. Here, Elias's signed return is best treated as the offer, and the committee's execution was the only acceptance authorized by the document. Because that never happened, no contract was formed. (Derived from La Salle National Bank v. Vega (n.d.).)