A library and an artist sign a written contract to purchase a sculpture for $1,000 due upon delivery. Before signing, the agent notes that the library’s obligation is conditioned on the chairperson’s approval, which is orally obtained the next day. Ten days later the artist decides not to sell. If the library sues for breach, is there a valid contract despite the contingency?

• A. Yes, because the agreement was supported by good consideration despite the contingency.
• B. No, because the condition precedent was not satisfied.
• C. Yes, because the chairperson’s approval implied acceptance.
• D. No, because the contract binds future performance.

Answer: (A)

The main idea is that a contract can be conditioned on a precondition (a condition precedent), and it becomes binding once that condition occurs. Here, the library’s obligation to buy the sculpture was conditioned on the chairperson’s approval. That approval was obtained orally the next day, so the condition was satisfied. With the contingency met, the written contract to purchase for $1,000 becomes a binding agreement, supported by consideration—the library’s promise to pay upon delivery and the artist’s promise to deliver. When the artist later refuses to sell, that is a breach, and the library has a valid claim for damages.

If the chairperson’s approval hadn’t happened, there would be no binding contract due to the unresolved condition. The approval itself doesn’t create acceptance by the library; it merely satisfies the condition. And contracts can bind future performance, which is consistent with the library’s duty to pay upon delivery once the sculpture is delivered.