Attorney's failure to approve makes contract unenforceable, Court of Appeals holds

By Lori Irish Bauman
August 11, 2007

When two parties agree on all material terms of a contract, the agreement may be unenforceable if one of the parties makes the transaction subject to review by his lawyer.  That was the conclusion last week by the Oregon Court of Appeals in Oregon Southwest, LLC v. Kvaternik.  The parties negotiated the sale of real property, agreeing on the purchase price and payment terms.  The written agreement included a provision that the transaction was "subject to review and approval" by the seller's attorney.  After later consulting with his attorney, the seller proposed alternative financing terms.  The buyer sued for specific performance of the original agreement, and the trial court granted summary judgment in favor of the buyer.  Judge Schuman writing for the Court of Appeals reversed, holding that a condition precedent -- the attorney's approval -- never occurred, negating the contract.

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