Edgar and Peggy Stacy owned a 588-acre farm in Mississippi County, Arkansas. In June 1985, the Williams family agreed to purchase the Stacys’ farm for $882,000. The Stacys’ real estate agent inserted into a preprinted contract (just after the provision stating the purchase price) the following typewritten statement “Buyers to pledge approximately 900 acres of land in Tallahatchie County in Mississippi together with lands herein described for loan to pay purchase price.” The Williams family failed to obtain financing for the property, in part because the farm in Tallahatchie County was subject to a long-term lease and because the value of the lands they held turned out to be less than they had assumed. The Williams family notified the Stacys’ real estate broker of these facts, and the family also wrote a letter to Edgar Stacy stating that they wanted to rescind the contract for these reasons. Several months later, the Stacys sold the farm to another party for $630,000 and sued the Williams family for breach of contract, seeking $252,000, which represented the difference between the $882,000 purchase price offered by the Williams family and the $630,000 paid by the purchaser of the property. The issue before the court is whether the ability of the Williamses to obtain financing was a condition precedent to the Williamses’ obligation to perform under the contract. Assuming that parol evidence is admissible, how should the court rule? Discuss.

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In this case when the Williams family consented to buy the farm that belonged to Edgar and Peggy Sta... View the full answer