MEMORANDUM

From: Nadiuchka E. Lopez-Lopez

To: Reader
Date:04/21/2016
Re: Vivian v Bernie: Mutuality of Consideration

[Facts] On February 1st, Bernie put his 2006 Ford Fusion up for sale. Vivian contacted Bernie
on March 1st interested in purchasing his vehicle. Bernie extended an invitation to Vivian on
March 5th for them to meet in order to further discuss negotiations. Vivian met up with Bernie at
his place of residence on March 10th, they agreed on a purchase price of $12,500. Vivian
informed Bernie that she needed an additional three weeks in order to obtain the funds. Bernie
agreed to give Vivian until March 31st to purchase the vehicle under the condition that she put
down a $1,000 deposit. Vivian agreed to the contract terms written by Bernie as shown below.
Bernie agrees to sell his 2006 Ford Fusion to Vivian for $12,500 and Vivian agrees to purchase
the same for such price. The transaction shall take place no later than March 31.

In the event that the seller breaches this agreement, the seller must refund the purchaser's
deposit, but the parties shall be limited to this remedy and only this remedy.

In the event that the buyer breaches this agreement, the seller may keep the buyer's deposit, but
the seller shall be limited to this remedy and only this remedy.

Two weeks after the contract was signed, Vivian contacts Bernie to inform him that she will not
be able to purchase the vehicle. Bernie refuses to refund Vivians $1,000 deposit based on the
contract they agreed upon.
[Issue] The issue is whether, under Virginia law, there was sufficient mutuality of consideration
for the agreement to be binding, thereby allowing Bernie to keep Vivians deposit.
[Rule/Relevant Law] In American Agricultural Chemical Co. v. Kennedy & Crawford, 103 Va.
171 (Va. 1904), the court held that The general rule of law iswhere the consideration for the
promise of one party is the promise of the other party, there must be absolute mutuality of
engagement, so that each party has the right to hold the other to a positive agreement. Both
parties must be bound. Both parties must be required to perform under the contract, in other
words, it must be enforceable originally, or not at all. Sayres v. Wheatland Group, L.L.C., 79
Va. Cir. 504 (Va. Cir. Ct. 2009). As stated by The Circuit Court of Fairfax County, Virginia "if it
appears that one party was never bound on its part to do the acts which form the consideration

for the promise of the other, there is a lack of mutuality of obligation and the other party is not
bound." Busman v. Beeren & Barry Invs., LLC, 69 Va. Cir. 375 (Va. Cir. Ct. 2005).
[Analysis/Application] Like the cited cases above, our case of Vivian v. Bernie lacks mutuality
of consideration. The reason being, Bernie never bound himself to the contract signed by both
parties. When Bernie wrote In the event that the seller breaches this agreement, the seller must
refund the purchaser's deposit, but the parties shall be limited to this remedy and only this
remedy He freed himself of any duty of having to perform his part of the contract.
"[b]uyer's sole [506] remedy in law or at equity in the event of Trustee's default shall be a refund
of the deposit hereby received and, upon the delivery of the deposit refund, this agreement, and
the sale contemplated by this Memorandum of Sale shall be null and void." Id. Sayres v.
Wheatland Group,
"by this clause, [the trustee] frees himself of any obligation to perform his contract with [the
purchaser], [and] since the agreement, with this clause binds only one party, the contract lacks
mutuality and will not be enforced." Sayres v. Wheatland Group,
Vivians $1,000 deposit was considered consideration on her behave. Bernies act of
taking the vehicle off the market during the period the contract was held open is not considered
consideration, because Bernie would not have suffered any legal detriment by removing the
vehicle off the market. If Bernie decided he wanted to back out of the contract he could simply
return the deposit to Vivian, put the car back out on the market, and ask for his original asking
price. Without losing out on anything on his part, therefore Bernies act of not advertising the
vehicle for 21days is not an act of consideration by Virginia law. In Busman v. Beeren & Barry
Invs. The court found that the argument that the limitation clause does not destroy mutuality but
merely limitsremedy to the recognized measure of damages for a purchaser's breach of a
contract for sale of real estate: the return of the purchaser's deposit To be invalid.
Furthermore, in the American Agricultural Chemical Co. v. Kennedy & Crawford the
Virginia Supreme Court found that the contract lacked mutuality of obligation by the parties,
because only one of the parties was bound to the contract. In this case the plaintiff made a
proposition to sell, which the defendant accepted, but the plaintiff's offer left it optional with it
whether or not it would sell. It did not bind itself to sell. Also, As that proposition did not bind
the plaintiff to sell, there was no consideration for the defendant's promise to purchase, and, as
we have seen, neither party was bound at that time.
[Conclusion] Based on the contract, rule, and supported cases provided above this contract is not
binding. By Virginia law the contract lacked mutuality of consideration; therefore, Bernie must
return Vivians deposit of $1,000.