Procedural Posture

Appellee vendor sold a dairy business to appellant buyers under a conditional contract of sale. Although the buyers’ post-closing claims of vendor misrepresentation resulted in oral agreements to postpone or reduce some payments, the vendor later refused to accept a payment and instead sued for damages and fees. After a directed verdict for the vendor was entered by the Superior Court of Sacramento County (California), the buyers appealed.

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Overview

In response to the buyers’ claim that the income from the business they purchased was less than he had represented, the vendor agreed to defer three monthly payments and to accept a lesser amount for three additional months thereafter. No accord was reached as to payment of resulting arrearages. At the end of the six month period, the vendor demanded payment in full. When payment was not made, the vendor refused to accept tender of full payment for the seventh month, and sued for breach. The trial court directed a verdict for the vendor, and the buyers appealed. The court reversed. It rejected claims that the oral undertaking affecting the six payments was unenforceable because it was fully executed. By entering into that undertaking, moreover, the vendor was estopped from claiming that the making of the reduced payments constituted breach. Nor could the vendor declare breach based on nonpayment of the seventh payment because he failed to prove that the check was not timely tendered and, in any event, his suit was filed prior to the expiration of the contractual grace period with the result that the claim was premature.

Outcome

The court reversed the order directing the verdict in favor of the vendor.