Homler v. Malas Case Brief Summary | Law Case Explained

Homler v. Malas | 494 S.E.2d 18 (1997)

Generally, parties may include certain conditions in a real estate contract that must be met before performance becomes due.1 But what if the parties condition a real estate sale on the buyer’s obtaining a loan and don’t specify the interest rate? Is this type of condition too vague to be enforced? The Georgia Court of Appeals considered this question in Homler versus Malas.

In the nineteen nineties, Robert and Barbara Homler agreed to sell their home in DeKalb County, Georgia, to Mohannad Malas . To this end, the parties entered into a form contract that included blank spaces for the parties to write specific information.

The form stated that the contract was contingent upon Malas’s obtaining a loan to finance the home purchase.

The parties then wrote in the form that the contract was contingent on Malas’s obtaining a loan to cover eighty percent of the purchase price. Further, they wrote that the contract was also contingent on Malas’s getting a loan for at least a thirty-year term.

However, the parties didn’t stipulate that the contract was contingent on Malas’s being approved for a loan at a particular interest rate or for a specific monthly payment amount.

After signing the contract, Malas, through his real estate agent, made a twenty-five-thousand-dollar earnest-money deposit to the Homlers’ real estate agent, Harry Norman Realtors.

After the parties failed to close, the Homlers sued Malas in state superior court for breach of contract. In their complaint, the Homlers argued that Malas breached the contract by failing to make a good faith effort to meet the contingency provision.

In response, Malas denied the claims and, following discovery, moved for summary judgment. Specifically, Malas argued that the contract was too vague to be enforceable because the loan contingency terms weren’t sufficiently identified. Malas also filed a counterclaim and cross-claim against Harry Norman Realtors for the return of his earnest-money deposit.

The court agreed and granted Malas’s motion for summary judgment. The Homlers appealed to the Georgia Court of Appeals.

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