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Mezzanotte v. Freeland
Court of Appeals of North Carolina
200 S.E.2d 410 (1973)
In May 1972, the Mezzanottes (plaintiffs) and Freelands (defendants) entered into an agreement for the Freelands to sell real property to the Mezzanottes. The agreement provided that the sale was contingent on the Mezzanottes obtaining a “second mortgage from North Carolina National Bank on such terms and conditions as are satisfactory to them ….” The Mezzanottes failed to secure the loan from North Carolina National Bank but obtained funding through alternative sources. In September, they delivered to the Freelands a $200,000 down payment as well as a note and deed of trust for the balance of the purchase price. The Freelands refused to sell, however, and the Mezzanottes brought suit for specific performance of the sale and for damages for breach of contract. In defense, the Freelands contended that the May contract was unenforceable for lack of consideration because the Mezzanottes’ receipt of funding was conditioned on the loan being “satisfactory to them.” The Freelands argued that such condition made the Mezzanottes’ promise illusory. The trial court disagreed, concluding that the agreement was valid and that the Mezzanottes’ tender of payment constituted substantial compliance with the contract. The Freelands appealed.
Rule of Law
Holding and Reasoning (Baley, J.)
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