## Facts

- John and Betty Clark listed approximately 59 acres for sale through a realty broker at $3,000 per acre.
- Omni Group, Inc., a real estate development company, offered to buy the property for $2,000 per acre through a written earnest money agreement that the Clarks signed.
- The agreement made the transaction subject to Omni receiving an engineer’s and architect’s feasibility report prepared by professionals of Omni’s choice at Omni’s expense.
- The agreement required Omni to notify the sellers in writing within 15 days of acceptance if the report was satisfactory; if no notice was sent, the transaction would be null and void.
- After the Clarks signed, they sought additional terms (including improvements to adjacent land) that were not included in the earnest money agreement and were not initially communicated to Omni.
- Omni later delivered a letter stating it would forgo a feasibility study and noted a survey showing fewer acres than expected; the parties discussed adjusting the deal to a minimum-acreage price.
- Omni subsequently agreed in writing to the Clarks’ additional terms, but the Clarks refused to proceed with the sale after consulting an attorney.
- Omni sued to specifically enforce the earnest money agreement; after the Clarks died, Seattle-First National Bank, as executor, was substituted as the respondent.

## Issues

1. Whether a buyer’s promise conditioned on a “satisfactory” feasibility report is an illusory promise that prevents formation of an enforceable bilateral contract.
2. Whether a feasibility-report condition inserted for the buyer’s benefit may be waived by the buyer without defeating enforceability.

## Decision

- The Court of Appeals reversed the judgment for the sellers’ estate.
- The court held the feasibility-report provision created a condition precedent to performance, not a lack of consideration or mutuality.
- The buyer’s “satisfaction” condition imposed an obligation to exercise judgment in good faith, which prevented the promise from being illusory.
- Because the condition was for Omni’s benefit, Omni could waive it, and the waiver did not render the agreement unenforceable.
- The court concluded the earnest money agreement constituted a valid, enforceable contract.

## Legal Principles

- A promise conditional on a condition precedent is not illusory merely because performance depends on the occurrence of the condition.
- A satisfaction clause is enforceable because it carries an implied duty to exercise judgment in good faith; the power to terminate is not unlimited.
- Mutuality of obligation is lacking only when a party may perform or withdraw at its unrestricted desire; a good-faith constraint supplies the needed obligation.
- A condition precedent included solely for one party’s benefit may be waived by that party without destroying the contract’s enforceability.

## Conclusion

The court held that a real estate purchase agreement conditioned on the buyer’s satisfaction with a feasibility report was enforceable because the buyer was bound to act in good faith and could waive a condition included for its own protection.


Omni Grp., Inc. v. Seattle-First Nat'l Bank, 32 Wn. App. 22, 645 P.2d 727 (Wash. Ct. App. 1982)