## Facts

- Jack W. Morrison Jr. was in the business of buying houses, refurbishing them, and renting them to college students.
- Jonas Bare owned a house that Morrison considered purchasing; Tom Campensa, a real-estate agent, showed the house to Morrison.
- During his inspection, Morrison saw a sticker on the furnace indicating the furnace had a cracked heat exchanger.
- After Campensa checked with Bare, Campensa told Morrison the furnace had been repaired in 2004.
- Morrison submitted a written offer to purchase the house using a form purchase agreement that included an inspection right and a mechanism to void the deal if unsatisfactory conditions could not be resolved.
- In the offer’s “Special Conditions,” Morrison wrote that the seller would supply the buyer with a copy of the furnace repair bill from 2004 within 14 days.
- A few days later, Morrison signed an amendment removing his inspection right and stating that he recognized no one was warranting the property in any manner; Bare signed the agreement and the amendment.
- Bare provided a 2004 furnace repair bill within the required time, but the bill did not show any repair or replacement of the heat exchanger, and the heat exchanger had not been replaced.
- Morrison then told Bare he would close only if Bare replaced the furnace or reduced the purchase price by the furnace-replacement cost.
- Bare refused to replace the furnace or reduce the price, and Morrison refused to close on the agreed terms.
- Morrison sued Bare for specific performance and breach of contract and sued Bare, Campensa, and Campensa’s agency for fraud.
- The trial court granted summary judgment to all defendants; Morrison appealed.

## Issues

1. Whether Morrison could obtain specific performance or damages for breach of the purchase contract when he did not close and did not show he was ready and able to perform on the contract’s terms.
2. Whether the “Special Condition” requiring Bare to provide a copy of the 2004 furnace repair bill created a contractual promise supporting breach remedies, or instead operated as a condition affecting Morrison’s duty to perform.
3. Whether Morrison produced evidence of justifiable reliance to support fraud claims based on the agent’s statement that the furnace had been repaired.

## Decision

- The court affirmed summary judgment for all defendants.
- Morrison could not succeed on specific performance or breach of contract because he neither performed nor showed readiness and ability to perform under the existing agreement; instead, he demanded new terms (a furnace replacement or a price reduction) as a condition of closing.
- The furnace-bill “Special Condition” operated as a condition for Morrison’s benefit rather than a promise that the heat exchanger had been repaired; Bare satisfied the contractual requirement by providing the bill, and the failure of Morrison’s hoped-for fact (proof the heat exchanger was fixed) did not create a breach claim.
- Morrison’s fraud claims failed because his reliance on statements about the furnace was not justifiable as a matter of law given the visible warning of a cracked heat exchanger, his sophistication, and his decision to waive inspection and proceed under non-warranty language.

## Legal Principles

- A party seeking to enforce a real-estate purchase agreement through damages or specific performance must show performance or that he was ready, willing, and able to perform on the contract’s terms.
- A promise creates a duty and a potential remedy for breach; a condition is an event that must occur before a duty becomes due, and absent a separate promise that the event will occur, the event’s nonoccurrence does not itself create breach liability.
- In fraud, a plaintiff must show justifiable reliance; reliance may be unjustified where the plaintiff is aware of warning signs, has the ability to investigate, and chooses to waive inspection rights or accept non-warranty terms.

## Conclusion

The Ninth District affirmed summary judgment because Morrison refused to close on the agreed contract terms and did not show readiness and ability to perform, the furnace-bill clause functioned as a condition for Morrison’s benefit rather than a seller promise that the heat exchanger was repaired, and Morrison could not prove justifiable reliance for fraud in light of the furnace warning sticker and his waiver of inspection and warranty protections.


Morrison v. Bare, No. 23667, 2007 WL 4415307 (2007)