## Facts

- Buyers and sellers executed a written contract (May 2, 1972), later supplemented (June 17, 1972), for sale of an improved real-estate complex and related business personalty in Orange County, North Carolina.
- The contract made the buyers’ duty to purchase contingent on their ability to obtain a second mortgage from a specified bank on terms satisfactory to them.
- Buyers undertook extensive preparatory steps for financing and operation, including projections, surveys, title work, and forming related entities for the planned transaction.
- The sellers did not timely provide an inventory of personal property and a list of outstanding leases, despite repeated requests asserting the information was necessary for financing and promotion.
- The extended performance period expired August 1, 1972, without either side tendering performance or declaring breach; thereafter, the parties agreed to close in late August/early September.
- Buyers did not obtain the contemplated bank loan on acceptable terms but secured alternate financing and tendered a $200,000 down payment plus a note and deed of trust for the balance.
- Sellers refused to convey; buyers sued for specific performance and damages.

## Issues

1. Whether the writings sufficiently described the property to satisfy the Statute of Frauds for a land-sale contract.
2. Whether the financing contingency “on terms satisfactory to” the buyers made the buyers’ promise illusory, defeating consideration and enforceability.
3. Whether buyers’ efforts and tender (including alternate financing) constituted sufficient compliance to warrant specific performance.

## Decision

- The Court of Appeals of North Carolina affirmed judgment for the buyers.
- The property description satisfied the Statute of Frauds when the contract and related writings delivered with it were read together.
- The financing-satisfaction condition did not render the contract illusory because the law implied buyers’ duties of good faith and reasonable efforts.
- The buyers acted in good faith, used reasonable efforts to obtain financing, and substantially performed by tendering the down payment and purchase-money instruments; the sellers’ refusal to convey was a breach.

## Legal Principles

- Multiple writings connected to the same transaction may be read together to satisfy the Statute of Frauds when they sufficiently identify the property and are part of the executed agreement.
- A promise conditioned on an event within the promisor’s control is not illusory if the promisor is bound by an implied obligation to use reasonable efforts to cause the condition and to exercise good faith and honest judgment as to satisfaction.
- An implied duty of good faith and reasonable efforts can supply legal detriment and support consideration, preserving mutual enforceability of a contract containing a satisfaction-type financing contingency.
- Specific performance may be ordered where the buyer substantially performs and tenders performance, and the seller unjustifiably refuses to convey.

## Conclusion

The court enforced the land-sale contract despite a “financing on terms satisfactory to the buyer” clause, holding that good-faith and reasonable-efforts obligations were implied, the Statute of Frauds was satisfied by integrated writings, and the buyers’ tender warranted specific performance and related relief.


Mezzanotte v. Freeland, 20 N.C. App. 11, 200 S.E.2d 410 (1973)