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Business Law

Joe's Pizzeria and Sub Shack wishes to expand its restaurant and enters into an agreement with the owner of the adjoining lot, Sam Seller, to purchase the land and begin construction. A condition precedent to the contract is Joe's ability to obtain financing from First Bank. Joe dutifully applies for the construction loan, but, as he cannot make up his mind about the new design, he is not sure how much he needs to secure in financing. This indecision continues for three months. Needless to say, Sam becomes frustrated at Joe's fickle nature and demands that Joe make up his mind. What recourse, if any, does Sam have in this situation?

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This really depends on the contract. The contract will have a mortgage contingency clause, which will state that failure to obtain financing would kill the deal. However, ...

Solution Summary

Joe's Pizzeria and Sub Shack wishes to expand its restaurant and enters into an agreement with the owner of the adjoining lot, Sam Seller, to purchase the land and begin construction. A condition precedent to the contract is Joe's ability to obtain financing from First Bank. Joe dutifully applies for the construction loan, but, as he cannot make up his mind about the new design, he is not sure how much he needs to secure in financing. This indecision continues for three months. Needless to say, Sam becomes frustrated at Joe's fickle nature and demands that Joe make up his mind. What recourse, if any, does Sam have in this situation?

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