Greer Properties, Inc. v. LaSalle National Bank
United States Court of Appeals, Seventh Circuit
874 F.2d 457 (1989)
LaSalle National Bank and Old Orchard West Venture (the Sellers) (defendants) owned a piece of commercial real estate. The property was partially contaminated by environmental waste. The Sellers offered to sell the property to Searle. Searle performed an environmental assessment on the property and determined that the cost of cleaning up the waste would be $500,000.00. Searle requested that the Sellers reduce the purchase price, but the Sellers refused. Searle terminated negotiations for the purchase of the property. The Sellers next entered into negotiations to sell the property to Greer Properties, Inc. (Greer). The resulting contract between the Sellers and Greer provided that the Sellers would clean up the property at their own expense, but could terminate the contract if they believed the clean-up costs were “economically impracticable.” Greer agreed to this arrangement. The Sellers conducted a new environmental assessment of the property and determined that the clean-up costs were between $190,000.00 and $240,000. The Sellers determined this cost was economically impracticable, but did not inform Greer of this determination. Shortly after the Sellers completed their assessment, Searle made a second offer to purchase the property at a much higher price than was offered by Greer. One day after receiving this offer from Searle, the Sellers informed Greer that they were terminating the contract to sell the property to Greer. Greer brought suit in federal district court against the Sellers on the ground that the Sellers breached their implied obligation to terminate the contract only by acting with good faith and fair dealing. The district court granted the Sellers’ motion for summary judgment, and Greer appealed.
Rule of Law
Holding and Reasoning (Wood, J.)