According to the case law as of the date of this article, the contract is unenforceable because it lacks mutuality. Meaning, both parties did not have the same rights under the contract.
The Case Of One Party To A Florida Real Estate Contract Having The Right To Cancel The Deal Without The Other Party Having The Same Right
In Allington, Annette Rubin signed a contract to purchase a condominium in the Allington Towers. Sometime after the purchase agreement was signed, an addendum was added, which stated:
[I]t is expressly agreed that the Buyer shall have the absolute and unfettered right to cancel and/or rescind said Purchase Agreement any time before closing, notwithstanding any contrary provisions in the Purchase Agreement.
Ms. Rubin decided she did not want to complete the contract and purchase the condo. She refused to close.
So, a lawsuit was filed by the Allington Towers to force “specific performance” of the purchase agreement, asking the court to make Ms. Rubin go through with the transaction.
The crux of the litigation was the language of the documents signed by the parties.
The trial judge ruled against the Allington Towers. It appealed and won.
According to the reviewing court, the “crux” of this case depended upon whether the written agreement, including its addendum, was legally unenforceable because of a failure to have mutuality: mutuality of obligation and mutuality of remedy.
The key to the case was the addendum. The evidence showed that the addendum was executed subsequent to execution of the contract.
It was admitted into evidence without objection. There was no testimony challenging it.
In Florida, there must be mutuality to have an enforceable agreement. There must be both (1) mutuality of obligation and (2) mutuality of remedy. These are essential elements of an enforceable contract under the law. See Howard Cole & Co. v. Williams, 157 Fla. 851, 27 So.2d 352 (1946) and Burger Chef Systems, Inc. v. Burger Chef of Florida, Inc., 317 So.2d 795 (Fla. 4th DCA 1975).
In this case involving the purchase and sale of a condo, the addition of the addendum to contract required the seller to convey if the purchaser, Ms. Levin, decided to go forward.
However, the addendum left the seller, Allington Towers, with no corresponding right to enforce a sale and closing if Ms. Levin chose not to go forward.
The language of the addendum focuses solely upon Annette Levin.
The court could not “… envision a clearer case of lack of mutuality.” So, the trial judge’s decision in favor of the contract’s enforceability was reversed and judgment was ordered to be entered in favor of the condo owner.
Note: The holding in this case cannot be applied to terminate all real estate contracts in Florida. Especially those where a “standard” real estate contract was used. The issue of mutuality is addressed in most “standard” real estate contracts.
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