Friday, November 29, 2013

Billman v. Hensel case brief

Billman v. Hensel case brief summary
391 N.E.2d 671 (1979)

Appellant buyers challenged a judgment of the Allen Superior Court, Small Claims Division (Indiana) entered against them and in favor of appellee sellers in the sellers' action for specific performance of a contract to sell a house to the buyers.

The sellers contracted to sell their home to the buyers. A condition of the contract was the ability of the buyers to secure a conventional mortgage on the property for not less than $ 35,000 within 30 days. When the buyers did not complete the purchase, the sellers commenced an action to secure a $ 1,000 earnest money/liquidated damage deposit required by the contract. The buyers defended upon the basis that they were relieved from performing in that they could not obtain financing. The trial court entered judgment in favor of the sellers.


  • The court affirmed, holding that the buyers were not excused from performance. 
  • The "subject to financing" clause imposed upon the buyers an implied obligation to make a reasonable and good faith effort to satisfy the condition. 
  • The evidence supported the trial court's conclusion that the sellers carried their burden of proof by establishing that the buyers had not made a reasonable and good faith effort to secure the necessary financing and, therefore, could not rely upon the condition to relieve their duty to perform.

The court affirmed the trial court's judgment in favor of the sellers.

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