2021 Ohio 4308
Ohio Ct. App.2021Background
- Kertes (seller/builder) and the Sanders (buyers) signed a purchase agreement for a new single-family home with a handwritten term: the parties agree to execute the builder’s purchase agreement (BPA) within 5 days; earnest money $7,000.
- The BPA was not produced within five days; when the Sanders received it they discovered undisclosed obligations/fees (e.g., $3,500 capital contribution, $1,000 maintenance fee, three months dues) and detailed basement-construction terms that altered price/obligations.
- The Sanders notified Kertes they would not close and demanded return of earnest money; Kertes sued for breach of contract and damages; Sanders counterclaimed among other defenses.
- Trial court originally declared the purchase agreement void and returned earnest money; this court reversed that declaration on first appeal and remanded to decide whether a binding contract existed and whether a breach occurred.
- On remand the trial court granted summary judgment for the Sanders, finding the BPA term was material and the parties never reached a meeting of the minds because they never agreed to the BPA; Kertes’ motion for summary judgment was denied.
- The Eighth District affirmed: the BPA contained essential price/obligation terms and an integration clause; because the parties never agreed to the BPA, no binding contract formed and no breach occurred.
Issues
| Issue | Plaintiff's Argument (Kertes) | Defendant's Argument (Sanders) | Held |
|---|---|---|---|
| Whether the handwritten term requiring execution of a BPA was a material term and whether Kertes breached by not "timely" providing it | BPA was not a material term; the signed agreement was integrated and binding without the BPA | BPA was the final memorialization; it contained essential price/obligation terms and was material; parties were bound only upon agreement to BPA | BPA was material; because parties never agreed to BPA there was no meeting of the minds and no enforceable contract |
| Whether Kertes was entitled to summary judgment on its breach-of-contract claim | Kertes performed and Sanders breached by refusing to close | No enforceable contract existed because essential terms remained unresolved in the unsigned BPA | Kertes’ motion denied; summary judgment for Sanders affirmed (no breach) |
Key Cases Cited
- Kertes Enters., L.L.C. v. Sanders, 137 N.E.3d 733 (8th Dist. 2019) (prior appellate decision describing the parties’ negotiations and procedural history)
- Kostelnik v. Helper, 770 N.E.2d 58 (Ohio 2002) (contract formation requires offer, acceptance, consideration, mutual assent)
- Bellman v. Am. Internatl. Group, 865 N.E.2d 853 (Ohio 2007) (writing that appears complete is presumed to be an integrated agreement)
- Episcopal Retirement Homes v. Ohio Dept. of Indus. Rels., 575 N.E.2d 134 (Ohio 1991) (contract must be definite and show a meeting of the minds)
- Oglebay Norton Co. v. Armco, 556 N.E.2d 515 (Ohio 1990) (enforceability of preliminary agreements depends on parties’ intent to be bound)
- Doner v. Snapp, 649 N.E.2d 42 (Ohio App.) (elements of breach of contract)
- Borkey v. J.F. Glaze Cleveland L.L.C., 18 N.E.3d 820 (8th Dist. 2014) (preliminary agreements enforceable only if parties intended to be bound and terms are sufficiently definite)
