Fry v. George Elkins Co. – Case Brief
Fry v. George Elkins Co., 162 Cal. App. 2d 256, 327 P.2d 905 (Cal. 1958).
Facts: Fry (P) made an offer on a home owned by Miller through real estate broker George Elkins Co. (D). Fry’s offer was conditioned on obtaining a $20,000 loan at 5% for 20 years. The owners of the house accepted and agreed to pay George Elkins Co. a 5% commission or one half of the deposit if forfeited by the plaintiff.
Fry applied for a loan but after negotiations he failed to obtain one according to the terms of the agreement. Fry wrote to the owners to rescind the deal and the Millers sold their house to a third party. Plaintiff sued the defendant for the return of his deposit. The trial court awarded the plaintiff the balance of his deposit minus the broker’s commission and plaintiff appealed.
Issue: What acts are necessary in order for a party to make a good faith attempt to satisfy a condition?
Holding and Rule: A party must attempt to satisfy a condition by all reasonable acts in order for it to be deemed to have been in good faith.
The court held that Fry did not expend sufficient effort to secure a loan in order for his attempt to have been in good faith. Fry’s attempts to secure a loan were some evidence of good faith, however he was not entitled to reject a loan merely because it contained terms that he disliked that were not addressed in the contract.
See Nollan v. California Coastal Commission for a property law case brief addressing an issue involving the Takings Clause in connection with beachfront real estate.