Crabby’s Inc. v. Hamilton
Missouri Court of Appeals
244 S.W.3d 209 (2008)
James Hamilton (defendant) executed a contract to purchase Crabby’s, a restaurant owned by Fred and Carolyn Billingsly, owners of Crabby’s, Inc., (collectively Plaintiffs) for $290,000. Hamilton then assigned his interest in the contract to Paragon Ventures, L.L.C. (Paragon) (defendant) (collectively Defendants). The contract contained a provision that required the Defendants to use reasonable diligence in obtaining a loan and to provide a written loan commitment within 30 days of obtaining the loan. If the Defendants failed to do so, the contract terminated automatically. Defendants obtained a bank loan but never furnished the Plaintiffs with a written loan commitment. Thereafter, a closing date for the transaction was agreed upon, numerous repairs were made to the restaurant, and Plaintiffs started to transfer the utilities into the Defendants’ name. Two days prior to closing, Hamilton sent letter to Plaintiffs stating that the Defendants were backing out of the transaction entirely. Plaintiffs sold the restaurant nearly 12 months later for $235,000. Plaintiffs filed suit against Defendants for breach of contract and claimed as damages the difference between the contract price and the sale price. After a bench trial, the court held for Plaintiffs, and Defendants appealed.
Rule of Law
Holding and Reasoning (Lynch, C.J.)
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