## Facts

- Robert and Barbara Homler agreed to sell a single-family residence to Mohannad Malas using a pre-printed real estate contract form.
- The contract included a financing contingency with blanks for loan terms.
- The executed contract made the sale contingent on Malas “obtaining” a loan for 80% of the purchase price, payable in monthly installments over a term of no less than 30 years.
- The contract left unfilled two blanks for the interest rate and a blank for the monthly payment amount.
- The Homlers alleged Malas breached by failing to diligently and in good faith pursue financing.
- Malas sought return of his $25,000 earnest money held by Harry Norman Realtors; the broker interpleaded the funds and requested attorney’s fees.

## Issues

1. Whether a real estate sales contract is enforceable when its financing contingency omits essential loan terms—particularly the interest rate (and related monthly payment)—and provides no objective method to supply them.
2. Whether, given an unenforceable financing contingency, the sellers may recover breach-of-contract damages and retain the buyer’s earnest money.
3. Whether the broker that interpleaded the earnest money may recover attorney’s fees from the interpleaded funds.

## Decision

- The Court of Appeals of Georgia affirmed summary judgment for Malas.
- The court held the financing contingency was too vague and indefinite to be enforced because it failed to specify an essential loan term: the interest rate (and the monthly payment was also left blank).
- Because the condition precedent was unenforceable, the Homlers could not maintain a breach claim premised on Malas’s failure to obtain financing or allegedly inadequate efforts to do so.
- The court affirmed the order awarding Harry Norman Realtors $807.50 in attorney’s fees and disbursing the balance of the earnest money to Malas.

## Legal Principles

- An enforceable contract must be sufficiently definite as to all essential terms; courts will not enforce agreements requiring speculation about material provisions.
- In a financing contingency for a purchase-money loan, the interest rate is an essential term; omission of the rate (and related payment terms) renders the contingency unenforceable unless the contract supplies an objective standard to determine it.
- A missing essential term cannot be supplied by judicial reconstruction where the contract includes no benchmark (e.g., market rate, index, or identified lender’s standard terms) permitting ascertainment.
- Altering a contingency from buyer’s “ability to obtain” financing to “obtaining” financing does not cure indefiniteness if the financing itself is insufficiently described.

## Conclusion

The court affirmed summary judgment because the financing contingency left essential loan terms undefined and provided no objective mechanism to determine them, making the agreement too indefinite to enforce; Malas was entitled to return of the earnest money, and the broker’s interpleader attorney’s fees award was upheld.


Homler v. Malas, 229 Ga. App. 390, 494 S.E.2d 18 (Ga. Ct. App. 1997)