delivered the opinion of the court:
Plaintiffs, Ron and Barbarann Hubble, appeal from a grant of summary judgment entered by the circuit court in favor of defendants, Paul O’Connor and Lynda Simon. In their complaint, plaintiffs (sometimes hereinafter sellers) sought to recover damages
The facts of this case revolve around a common real estate transaction involving the purchase of a condominium. The written contract at issue contained an attorney review provision, which allowed the contract to be voided if either sellers’ or purchasers’ attorney gave written notice of disapproval within five business days after formation of the contract. Although the agreement was signed and tendered by defendant-purchaser Paul O’Connor to seller-plaintiff Ron Hubble, the parties continued to discuss modifications to the agreement past the disapproval period. Two weeks after the disapproval period had expired, purchasers’ attorney gave notice that he was invoking the disapproval clause. The parties filed cross-motions for summary judgment and, on February 28, 1996, the circuit court entered judgment in favor of the purchasers and against the sellers.
The contract is a standardized real estate sales agreement widely used in the Chicago area. The ágreement was executed on June 8, 1993. The attorney disapproval clause within the agreement states in pertinent part:
"This contract is contingent upon the approval hereof as to form by the attorney(s) for Buyer and Seller within 5 Business days after Seller’s acceptance of this contract. Unless written notice of disapproval is given within the time period specified above, then this contingency shall be deemed waived and this contract will remain in full force and effect.
If written notice of disapproval is given within the time period specified above, this contract shall be null and void and the earnest money shall be returned to the Purchaser.”
The contract also provides that notice of disapproval may be given or accepted by either of the parties’ attorneys.
Although the attorney disapproval clause expired by its own terms on June 15, 1993, the parties agreed on that day to extend the disapproval period to June 22, 1993. This extension was memorialized in a letter from purchasers’ attorney to sellers’ attorney. Sellers’ attorney returned the letter to purchasers’ attorney with his signature, formally approving the extension.
On June 17, 1993, purchasers’ attorney faxed to the sellers a "proposed Rider to the contract for review and comment.” On June 18, 1993, sellers’ attorney submitted modifications to the purchasers’ proposed rider. On June 21, 1993, purchasers’ attorney incorporated the sellers’ modifications into the rider and faxed the rider back to sellers’ attorney. At this point in time the rider was finalized but had not yet been executed.
On June 22, 1993, the last day of the contract disapproval period, sellers’ attorney telephoned purchasers’ attorney to inquire whether purchasers would agree to delaying the possession date. He suggested that the sellers lease the property back from purchasers for a short period of time following the closing. Purchasers’ attorney responded by proposing trading the later possession date for a change in the form of the earnest money. Sellers’ attorney agreed to the change in a telephone call that same day.
On June 30, 1993, sellers’ attorney received the last rider from purchasers’ attorney. This rider incorporated all the changes discussed on June 22, 1993, but left the exact possession date blank. Upon receipt of the document, sellers’ attorney telephoned the oifice of purchasers’ attorney and was instructed that the possession date to be inserted into the blank was "on or before August 23,' 1993.” The rider, however, remained unexecuted.
On July 6, 1993, in a letter written to sellers’ attorney, purchasers’ attorney summarily stated he had "withdrawn attorney approval.” He requested that the sellers return to his clients their earnest money.
On August 7, 1993, sellers put the property back on the market. The property ultimately sold at the end of January 1994 for $315,000, an amount $15,000 less than provided in the June 8 contract. Sellers claimed in their complaint that, in addition to selling the property at a lower price, they were forced
In seeking summary judgment, sellers asserted that the purchasers had not exercised the attorney disapproval clause in a timely manner and that the attempt to exercise it on July 6, 1993, was designed simply to exculpate purchasers from their binding contractual obligation to purchase the property. Sellers noted that purchasers conceded during discovery that part of their motivation in having their attorney withdraw his approval for the agreement was because defendant Paul O’Connor had a business opportunity to relocate from Chicago to Budapest, Hungary. Sellers also included in the motion excerpts from the deposition of defendant Lynda Simon in which she stated that, although she had not actually signed the June 8, 1993, real estate agreement itself, she had given permission to Paul O’Connor to sign her name to the contract. An examination of the sales agreement shows that both Lynda Simon and Paul O’Connor are identified as "purchasers.” Lynda’s signature, however, is followed by the annotation "by Paul.”
Purchasers filed their cross-motion for summary judgment asserting both that the attorney disapproval provision had been properly exercised and that the Illinois Fraud Act (the Statute of Frauds) (740 ILCS 80/0.01 et seq. (West 1994)) prevented sellers from enforcing the agreement. Purchasers based their Statute of Frauds argument on the fact that Lynda Simon had never actually signed the sales agreement and that it had been signed only by Paul. They argued that the contract was therefore incomplete and therefore could not be enforced against either Lynda or Paul. They also argued that the sellers’ failure to sign the proposed rider, which had been negotiated by the attorneys but ultimately disapproved by their attorney prior to its execution, precluded contract formation.
As we have noted, the trial court granted purchasers’ summary judgment motion and denied sellers’ motion. The court ruled that the riders and letters written by purchasers’ attorney constituted disapproval and thus voided the contract.
In Illinois, summary judgment is governed by the provisions of section 2—1005 of the Code of Civil Procedure. 735 ILCS 5/2—1005 (West 1994). Summary judgment is recognized to be a drastic remedy, which is properly granted only where the movant’s right to it is clear and free from doubt. Vicorp Restaurants v. Corinco Insulating Co.,
When all parties move for summary judgment, as here, the trial court is invited to decide the issues presented to it as a matter of law, and entry of summary judgment for one party or the other is proper. Maywood Proviso State Bank v. York State Bank & Trust Co.,
In this case, the dispositive issues are: (1) whether the parties entered into a valid contract on June 8, 1993, when Ron Hubble and Paul O’Connor signed the sales agreement; (2) if there was a valid contract, whether the parties’ subsequent discussions concerning the proposed rider acted as an implied disapproval; and (3) whether the failure of defendant Lynda Simon to sign her own name to the agreement precluded enforcement of the contract against either her or her codefendant, Paul O’Connor.
We begin our analysis by noting that contract formation requires only the existence of an offer, an acceptance, and consideration. La Salle National Bank v. Vega,
In pronouncing its ruling, the circuit court found that the writings between the parties after June 8, while "not a flat disapproval or condition approval,” were, nonetheless, "a modification.” The court noted the basic rule of contract formation, sometimes called the "mirror-image rule,” requiring that the acceptance strictly comply with the terms set forth in the offer. See Loeb v. Gray,
Nonetheless, simply because a communication discusses the possibility of modification does not necessarily mean that the communication is a demand for modification:
"A mere inquiry regarding the possibility of different terms, a request for a better offer, or a comment upon the terms of the offer, is ordinarily not a counter-offer. Such responses to an offer may be too tentative or indefinite to be offers of any kind; or they may deal with new matters rather than a substitution for the original offer; or their language may manifest an intention to keep the original offer under consideration.” Restatement (Second) of Contracts § 39, Comment b, at 106 (1981).
More fundamentally, this is not a case involving a question of contract formation. A counteroffer rejects an offer only when made before a contract is formed. Here, the contract was formed when defendants’ offer was accepted by plaintiffs on June 8, 1993. The mirror image rule is therefore not relevant.
Recognizing the clear nature of written terms of the June 8 agreement, purchasers suggest that the parties essentially had an implied covenant that the contract would not become binding until the rider was executed. None of the writings or testimony, however, supports such a conclusion. Moreover, such an implied covenant would directly contradict the express covenant in the attorney disapproval clause that the contract would remain in full force and effect if timely notice of disapproval was not given. Express covenants abrogate the operation of implied covenants, so the allegation of an implied covenant is not permitted to overrule or modify the express agreement of the parties. Sol K. Graff & Sons v. Leopold,
Once the contract came into existence on June 8, 1993, the only question regarding its enforceability was whether one of the attorneys would disapprove it within the stated
The first letter from purchasers’ attorney after the contract was signed and delivered by defendant Paul O’Connor was dated June 17, 1993. It stated:
"I have enclosed for your review and comment a proposed Rider to the above-captioned contract. Please give me a call to discuss after you have had a chance to review it.
Thank you for your help.”
Clearly, this letter did not invoke the attorney disapproval clause. It-served merely to request changes to what was, at that time, a binding agreement.
After most of his suggested changes had been made to the agreement in the form of a proposed rider, purchasers’ attorney, on the last day of the attorney disapproval period, June 22, 1993, again drafted a letter to the sellers. This letter stated:
"I would like to propose a final additional provision to the Rider which I previously submitted to you for discussion purposes.
I would like to add a provision which allows for the earnest money to be paid in the form of a promissory note to your clients in lieu of an actual cash payment during the mortgage contingency period.
* * *
I realize that this request is somewhat out of the ordinary, but is necessitated by tax concerns that my clients have.
* * *
I emphasize that the purchasers have applied for the mortgage and have received indications that they will be receiving a positive outcome. The sole reason I am raising this is because of the tax concerns.
I appreciate your consideration of this. Please give me a call to discuss as soon as it is convenient.”
Again, this letter hardly constitutes "disapproval” of the agreement. It does not clearly and unambiguously state that the contract would be disapproved and thereby voided unless the sellers agreed to the proposed modifications.
In any case, if there is doubt as to what was intended by the purchasers’ actions, that doubt is resolved in favor of avoiding a forfeiture of the contract. McElvain v. Dorris,
The contract in this case specifically stated that "unless written notice of disapproval is given *** the contract will remain in full force and effect.” Unquestionably, the option to disapprove the agreement is a powerful right and basic fairness requires that any communication invoking the disapproval right be made clearly and unambiguously. Only after the sellers have notice of disapproval are they free to list the property for resale. Correspondingly, were the sellers to invoke the disapproval provision, it would be only after the purchasers had received unambiguous disapproval that they would be able to consider making offers on other residences. It would be fundamentally unfair, in our view, to allow one party to give ambiguous disapproval so as to play both sides of the fence, i.e., to argue that a binding contract exists or that no contract exists, depending upon the development of subsequent events.
Purchasers rely upon Olympic Restaurant Corp. v. Bank of Wheaton,
Summarizing, we find that the writings here did not fairly inform the sellers that the contract would be voided under the attorney disapproval clause if the sellers failed to agree to the purchasers’ suggested changes. We therefore find the contract became irrevocable when the attorney disapproval period ended on June 22, 1993.
We now turn to purchasers’ invocation of the Statute of Frauds (740 ILCS 80/2 (West 1994)) as a defense to sellers’ contract claims. In Prodromos v. Poulos,
Even though she had given Paul O’Connor permission to sign her name, it is undisputed that Lynda Simon never signed the contract that was ultimately delivered by Paul O’Connor to the sellers; nor is it disputed that Paul O’Connor had no written authority to act as Lynda Simon’s agent for purposes of purchasing the property. As such, the Statute of Frauds serves as a bar to plaintiffs’ claims against Lynda Simon.
Sellers raise equitable estoppel and argue that Lynda Simon should not be permitted to raise the Statute of Frauds. Equitable estoppel is a doctrine that is invoked to prevent fraud and injustice. It arises whenever a party, by his word or conduct, reasonably induces another to rely on his representations, leading that person to change his position so as to be injured. Gary-Wheaton Bank v. Meyer,
The test used to evaluate an estoppel claim is whether, considering all the circumstances of the specific case, conscience and honest dealing require that a party be estopped. Carey v. City of Rockford,
Our determination that the Statute of Frauds precludes the written contract from being enforced against Lynda Simon leaves unresolved only the question of whether the contract may, nonetheless, be enforced against Paul O’Connor individually. Unlike Lynda Simon, O’Connor signed his own name to the June 8, 1993, agreement.
Sellers urge us to rely upon the Restatement (Second) of Contracts and hold defendant Paul O’Connor individually liable under the contract, despite the failure of Lynda Simon to sign her own name to the agreement. Section 135 of the Restatement provides:
"Where a memorandum of a contract within the Statute [of Frauds] is signed by fewer than all parties to the contract and the Statute is not otherwise satisfied, the contract is enforceable against the signers but not against the others.” Restatement (Second) of Contracts § 135 (1981).
In his defense, O’Connor cites cases in which courts have held that all vendors must sign a real estate sales contract in order for purchasers to enforce the agreement against any of them. See Madia v. Collins,
O’Connor’s reliance on such cases as Collins and Axe is misplaced. Here, O’Connor is not a vendor, but a purchaser. The Madia and Axe cases hold merely that those with an undivided interest in property do not have the legal authority to sell the entire property in the absence of written approval from their co-owners. In this case, in contrast, the defective signature is that of a co-buyer, Lynda Simon. Under these facts, where Paul O’Connor signed the agreement in his own name and tendered it to the sellers, there is no reason in either law or logic why he should not be individually bound by its terms.
For the foregoing reasons, the order of the circuit court of Cook County granting summary judgment in favor of defendant Lynda Simon and against the plaintiffs is affirmed; the order granting summary judgment in favor of defendant Paul O’Connor and against the plaintiffs is reversed. Pursuant to our authority under Supreme Court Rule 366(a)(5) (134 Ill. 2d R. 366(a)(5)), we hereby grant summary judgment in favor of plaintiffs and against defendant Paul O’Connor; we deny plaintiffs’ summary judgment motion against defendant Lynda Simon. The matter is remanded to the circuit court for further proceedings consistent with this opinion.
Affirmed in part; reversed in part and remanded.
GREIMAN, P.J., and QUINN, J., concur.
SUPPLEMENTAL OPINION UPON DENIAL OF REHEARING
JUSTICE ZWICK delivered the supplemental opinion of the court:
Following the filing of our opinion in this matter, plaintiffs, Ron and Barbarann Hubble, filed a timely petition for rehearing. Although in our opinion we found in favor of plaintiffs and against defendant Paul O’Connor, plaintiffs are dissatisfied with our determination that the Statute of Frauds prevents a finding of liability against Paul O’Connor’s codefendant, Lynda Simon. Plaintiffs assert that the opinion mischaracterizes the status of the pleadings in that it implies defendants affirmatively raised the Statute of Frauds as part of their responsive pleadings, but that plaintiffs failed to raise the counterdefense of equitable estoppel in their reply pleadings. In fact, as plaintiffs now point out, the Statute of Frauds defense was not raised by defendants until they filed their motion for summary judgment. It was only then that plaintiffs raised equitable estoppel as a counterdefense in their response to the motion, along with a claim that the Statute of Frauds defense had been waived because it was "tardy.”
For support of their argument, plaintiffs cite the opinion itself for the proposition that "[a] defense not properly pleaded is deemed waived even though support for the defense may appear within the evidence” (
We reject plaintiff’s waiver claim, as we implicitly did in our original opinion. The rule of waiver is a limitation on the parties, not upon the courts. Committee for Educational Rights v. Edgar,
In holding that plaintiffs had waived their estoppel counterdefense to Simon’s Statute of Frauds claim, we implicitly relied upon the principle that we may affirm the trial court when its decision is correct for any reason appearing in the record, even if that reason was not affirmatively relied upon by the trial court in reaching its decision. People v. Rodriguez,
Equitable estoppel prevents a party from taking advantage of her own wrongdoing. Goodwine State Bank v. Mullins,
There are six elements required to make an equitable estoppel claim: (1) voluntary words or conduct by the estopped party amounting to a misrepresentation or concealment of material facts; (2) actual or implied knowledge of the estopped party that the representations were not true; (3) lack of knowledge of the true facts by the innocent party both at the time made and at the time acted upon; (4) intent, or a reasonable expectation, on the part of the estopped party that the innocent party would act on the misrepresentations; (5) a reasonable, good-faith, detrimental change of position by the innocent party based on the misrepresentations; and (6) prejudice to the innocent party. Augustus v. Estate of Somers,
It is established that " '[a] party claiming the benefit of an estoppel cannot shut his eyes to obvious facts, or neglect to seek information that is easily accessible, and
Here, the record does not establish the elements of equitable estoppel against Lynda Simon. Most fundamentally, there is no evidence that Lynda Simon ever misrepresented or concealed a material fact from the plaintiffs. Rather, the record affirmatively establishes that all of the parties involved in the transaction knew Lynda had not personally signed the sales agreement and that Paul had signed on her behalf. Indeed, the agreement itself contains the notation "by Paul” following Lynda’s name on the signature line. Thus, every indication is that all the parties, including Lynda, believed that Paul’s signing of the agreement would bind Lynda at the time it was signed. To this end, Lynda freely admitted in her deposition that she had given Paul permission to sign the agreement. Consequently, the plaintiffs had the same facts available to them as did the defendants regarding the legal effect of the sales agreement. Plaintiffs cannot later blame Lynda because they failed to recognize the consequences of her failure to personally sign the agreement.
Because the record does not establish equitable estoppel, we reject plaintiffs’ claim that Lynda Simon is estopped from raising the Statute of Frauds. We therefore reaffirm the trial court’s grant of summary judgment in favor of Lynda Simon and against the plaintiffs.
For the foregoing reasons, as well as the reasons set out in our original opinion, the order of the circuit court of Cook County granting summary judgment in favor of defendant Lynda Simon and against the plaintiffs is affirmed; the order granting summary judgment in favor of defendant Paul O’Connor and against the plaintiffs is reversed. Pursuant to our authority under Supreme Court Rule 366(a)(5), we hereby grant summary judgment in favor of plaintiffs and against defendant Paul O’Connor; we deny plaintiffs’ summary judgment motion against defendant Lynda Simon. The matter is remanded to the circuit court for further proceedings consistent with this opinion.
Affirmed in part; reversed in part and remanded.
GREIMAN, P.J., and QUINN, J., concur.
Notes
Sellers urge that, if we find they have waived their estoppel argument, they be permitted to amend their pleadings to include it as a counterdefense. They note that they may amend their complaint in the appellate court pursuant to the provisions of Supreme Court Rule 362. 134 Ill. 2d R. 362. Sellers have failed, however, to make an application supporting their request, as required by the rule. See 134 Ill. 2d Rs. 362(a), (b).