## Facts

- In late December 1939, Price (plaintiff) planned to buy land and construct a building for a new business and arranged financing with Van Lint (defendant).
- Van Lint promised to loan Price \$1,500 on February 1, 1940, and Price promised to give Van Lint a mortgage deed on the land as security.
- Obtaining the deed and mortgage paperwork required communicating by ship with the landowner in Holland, creating a known risk that the documents would not be ready by February 1.
- Van Lint advanced \$134 toward the land purchase, with the understanding that it would be accounted for when the \$1,500 loan was paid out.
- Anticipating the loan, Van Lint contacted building material suppliers so materials could be furnished and construction could begin.
- On February 1, Price still did not have the mortgage deed because the overseas correspondence had not yet produced the needed documents.
- Van Lint refused to disburse the \$1,500 loan due to Price’s inability to deliver the mortgage deed on that date.
- Price sued for breach of the loan agreement; the trial court ruled for Price, concluding the promise to loan the money and the promise to provide the mortgage were independent covenants. Van Lint appealed.

## Issues

1. Were Van Lint’s promise to advance \$1,500 on February 1, 1940 and Price’s promise to deliver a mortgage deed dependent (so Van Lint could refuse payment until the mortgage was delivered), or independent (so Van Lint still had to fund on the agreed date)?
2. What damages are recoverable for the refusal to fund, including whether claimed profits from a new business are too uncertain?

## Decision

- The court affirmed the trial court’s determination that Van Lint breached the agreement by refusing to make the loan when due.
- The court held the covenants were independent: the loan was due on February 1 even though the mortgage documents were not yet obtainable through the anticipated overseas process.
- The court limited damages to amounts proved with reasonable certainty and rejected recovery of speculative profits tied to the delayed opening of a new business.
- The court allowed recovery of proven, foreseeable losses caused by the breach, such as measurable delay-related losses and reasonable expenses connected to obtaining alternate financing or carrying the project during the delay.

## Legal Principles

- Mutual promises are not treated as conditions of each other unless the contract language or necessary implication makes performance by one party a condition precedent to the other party’s duty.
- When the contract sets a time for one party’s performance that may arrive before the other party can perform (and the parties know that timing risk), the first performance can be an independent covenant rather than a simultaneous exchange.
- A party who promises to perform on a fixed date cannot avoid liability by demanding additional conditions not stated in the agreement.
- Contract damages must be proved with reasonable certainty; anticipated profits from an unestablished business are generally not recoverable because they are too uncertain.
- Foreseeable consequential losses that can be measured with reasonable certainty (including certain delay costs and reasonable mitigation expenses) may be recovered.

## Conclusion

Price v. Van Lint holds that where the parties agreed a loan would be funded on a fixed date despite known delays in obtaining mortgage documents from an overseas owner, the lender’s promise to fund was an independent covenant, and refusal to disburse constituted breach; however, damages were confined to losses proven with reasonable certainty, with claimed profits from a not-yet-open business treated as too uncertain to award.


Price v. Van Lint, 120 P.2d 611 (1941)