Waiver and the True Condition Precedent

 2. Waiver and the True Condition Precedent

Panoutsos v Raymond Hadley Corporation of New York

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  In determining whether a party waived their ability to rely on a condition precedent to rescind the contract:
  
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    Did the defendants by their acts or conduct lead the plaintiff reasonably to suppose that they did not intend to treat the contract for the future as at an end, on the account of the failure to perform the condition precedent?
    
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      If so there is an estoppel on the right to assert the condition unless the sellers giver reasonable notice of that intention to the buyer so as to enable him to comply with the condition which up to that time had been waived
      

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  Plaintiffs are the buyers, of flour
  
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  Defendants are the sellers, of flour
  
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  Contract for a lot of flour
  
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    Stipulates "Payment" by confirmed bankers' credit"
    
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      Revocable bankers credit means that the bank could close the credit at any time.
      
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  Plaintiffs opened credit in New York that wasn't irrevocable and therefore wasn't "confirmed bankers' credit"
  
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  The sellers took several shipments with from the buyers' non-irrevocable credit
  
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  Sellers ask buyers to extend the time of the payment (I don't know why)
  
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  The sellers then cancelled the contract on the ground that the buyer failed to perform a condition
  
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  Buyer's did not accept
  
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  Arbitrators awarded that the sellers were in default in not shipping the balance of the flour in accordance with the contract
  
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  Trial judge found the sellers could at any time insist upon the credit being put in order, BUT if they desired to cancel the contract they would have to give reasonable notice of their intention
  

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  Is there evidence that the sellers had waived the term in the contract that payment should be by confirmed bankers' credit?
  
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    If yes, award goes to plaintiffs
    
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    If no, award goes to defendants
    

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  For the Plaintiffs, Defendants had waived condition and did not give reasonable notice of intention to rely on it.
  

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  Judge agrees with trial judge
  
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  If at a later stage the sellers wished to avail themselves of the condition precedent, in my opinion there was nothing in the facts to prevent them from demanding the performance of the condition if they had given reasonable notice to the buyer that they would not ship unless there was a confirmed bankers credit
  
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  Case law:
  
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    Did the defendants by their acts or conduct lead the plaintiff reasonably to suppose that they did not intend to treat the contract for the future as at an end, on the accreddit.com/ount of the failure to perform the condition precedent?
    
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      If so they just need to give reasonable notice,
      
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        What is reasonable
        

Turney and Turney v Zhilka

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  A party cannot waive a precedent condition that depends on a third party for execution, as this is effectively rewriting the contract
  
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  A breach of contract cannot occur in a contract that relies on a third party for the fulfillment of a precedent condition, until that condition is satisfied
  

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  A contract between seller and buyer for property
  
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    Contracted contained the condition "providing the property can be annexed to the Village of Streetsville and a plan is approved by the Village Council for subdivision."
    
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  The seller thought he had more land than he did, he meant to keep 5 acres but only kept 1.5
  
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    (he probably would want to rewrite the contract if possible to give the buyer less)
    
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  Discovering this the Buyer waived the condition requiring annex and sued for specific performance
  

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  Was the buyer able to waive the condition precedent?
  

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  For the Seller
  

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  There is a problem with description of land but not the heart of the issue
  
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  The obligations under the contract, on both sides, depend upon a future uncertain event, the happening of which depends entirely on the will of a third party - the village council
  
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    Until the event occurs there is no right to performance on either side
    
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  Neither party has promised the condition will occur so there can be no breach of contract until it does occur
  
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  It is a condition precedent the relies on a third party for satisfying
  
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  "This is not a case of renunciation or relinquishment of a right but rather an attempt by one party, without the consent of the other, to write a new contract”
  

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  The 3^rd party
  

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  Benefit is to buyer but there is no statement
  
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  It is not incumbent on either party to perform