Common Contracts

Settlement and Breach of Contract: Key Takeaways from Parkway

November 2nd, 2021

• Filed
  November 2nd, 2021

This case concerns a company (“U.S. Home”) entering into a contract to purchase land from a limited liability company (“Purchase Agreement”) solely owned by two brothers (“Sellers”). On the same day of the purchase, U.S. Home executed a contract (“Development Contract”) with Bevard Development Company, which was to take steps in developing the land. Although not a party to either contract, Parkway—another limited liability company owned by the Sellers—classified itself as a “third-party beneficiary” of the Development Contract. Under the Development Contract, U.S. Home agreed to pay Parkway approximately $2.25 million “at the time of Settlement under the Purchase Agreement as reimbursement for Parkway’s acquisition of certain nearby properties for “right of way purposes” (“Reimbursement”). The Purchase Agreement defined “Settlement” as “[t]he consummation of the purchase and sale” of the land.