Monday, June 18, 2007

Frozen Embryos Law Found to Govern Disposition of Contract Dispute over Failed Sale of Land

The Texas Lawyer reported last year that a Houston appellate court found contract law to govern the disposition of frozen embryos in divorce. With a year's delay, Roman v. Roman has now made national headlines as it advances to the Texas Supreme Court for further review. In the meantime, the First Court of Appeals has started to invoke its brave-new-world precedent to resolve contract disputes of a more traditional nature, such as real estate transactions.

Potcinske v. McDonald Property Investments, Ltd. (Tex.App.- Houston [1st Dist.] Jun 15, 2007)(Higley)(breach of contract for sale of real property claim, specific performance, earnest money, contract formation and validity)

Houston Court of Appeals cites Roman v. Roman, 193 S.W.3d 40 (Tex.App.- Houston [1st Dist.] 2006, pet filed) as case law authority for the elements of the a valid contract

The law of contract formation (for disposition of frozen embryos as well as real estate transactions) as re-stated by the First Court of Appeals:

"Parties form a binding contract when the following elements are present: (1) an offer, (2) an acceptance in strict compliance with the terms of the offer, (3) a meeting of the minds, (4) each party's consent to the terms, and (5) execution and delivery of the contract with the intent that it be mutual and binding. Roman v. Roman, 193 S.W.3d 40, 50 (Tex. App.--Houston [1st Dist.] 2006, pet. filed); Wal-Mart Stores, Inc. v. Lopez, 93 S.W.3d 548, 555-56 (Tex. App.--Houston [14th Dist.] 2002, no pet.). "

"'Meeting of the minds' describes the mutual understanding and assent to the agreement regarding the subject matter and the essential terms of the contract. Weynand v. Weynand, 990 S.W.2d 843, 846 (Tex. App.--Dallas 1999, pet. denied). Mutual assent, concerning material, essential terms, is a prerequisite to formation of a binding, enforceable contract. T.O. Stanley Boot Co. v. Bank of El Paso, 847 S.W.2d 218, 221 (Tex. 1992). "

"Here, Potcinske does not dispute that he and McDonald Property failed to have a meeting of the minds regarding the seller-financing term. Rather, he contends that such failure does not preclude enforcement of the contract because the seller-financing term was not a material term on which mutual assent was required to form an enforceable contract."

Disposition: Trial Court's Judgment in Favor of Seller of Land Affirmed. Change in terms of sales contract was material and constituted counteroffer, which was rejected; thus there was no meeting of the minds, and no contract was formed.

Opinion author: Justice Laura Carter Higley

Other panel members: Judge Davie L. Wilson [retired and sitting in the case by assignment] and Justice Evelyn Keyes, who wrote the opinion in Roman v. Roman (embryo agreement between former spouses enforceable as a contract)

Appellate Cause No.: 01-06-00718-CV

Full Style of Case: Jon A. Potcinske v. McDonald Property Investments, LTD

Trial Court: 334th District Court of Harris County (Houston)

Trial Court Judge: Hon. Sharon McCally