By: Katelyn White

The Supreme Court of Maryland held that offerors may impose time condition precedents through accompanying settlement cover letters, and such condition precedents are enforceable under contract principles.  Pattison v. Pattison, 491 Md. 551, 564, 340 A.3d 217, 224 (2025).  The Court also held that silence after receipt of executed contract documents does not constitute waiver where the offer was withdrawn because the offeree failed to satisfy a condition precedent requiring timely execution.  Id. at 566, 340 A.3d at 225.

In 2019, Todd Pattison (“Husband”) initiated divorce proceedings against Deborah Pattison (“Wife”).  Wife’s counsel hand-delivered a settlement package to Husband’s counsel, which included a cover letter and a proposed settlement agreement (“Agreement”).  The cover letter included a condition that the Agreement and promissory note (“Note”) must be executed the same day it was sent, with the final guaranty (“Guaranty”) to be signed by close of business the following Monday.  Husband received the settlement packet by email on Friday but waited until the subsequent Monday to sign.

Husband filed an amended complaint to enforce the agreement, and Wife responded in opposition.  The Circuit Court found a valid offer and acceptance and excluded the cover letter from evidence on hearsay grounds.  On Wife’s second appeal, the first of which the court dismissed for lack of final judgment, the Appellate Court of Maryland reversed.  The Appellate Court held that no contract was formed because Husband failed to execute the Agreement by the deadline explicitly stated in the cover letter.  The Court also found no evidence that Wife had waived this condition due to silence.  Husband petitioned and the Supreme Court of Maryland granted certiorari to address two issues: whether an offer and acceptance existed between the parties, and whether Wife waived the deadline as a result of her silence.

To begin their analysis, the Court noted that the parties did not dispute the Agreement’s terms and the fact that Wife was the offeror.  Pattison, 491 Md. at 562, 340 A.3d at 223.  Because the material facts were undisputed, the Court applied a de novo standard of review as to the issue of contract formation.  Id. at 562, 340 A.3d at 223.

First, the Court applied a reasonable person standard to assess whether there was an offer and acceptance present.  Pattison, 491 Md. at 563, 340 A.3d at 224.  Specifically, the Court stated that an offer is evaluated based on the understanding of a reasonable person in the parties’ position.  Id. at 563, 340 A.3d at 224.  The Court found that the cover letter expressly distinguished between the “Agreement” and “Note,” which had to be signed by the end of business on Friday, versus the guaranty, which could be executed by end-of-business Monday.  Id. at 564, 340 A.3d at 224.  The Court further found that the cover letter unambiguously imposed a Friday deadline.  Id. at 564, 340 A.3d at 224.  The Court also determined that a reasonable person would find no flexibility in the deadlines set forth.  Id. at 563-64, 340 A.3d at 224.

Similarly, the Court was unconvinced by Husband’s argument that the condition was invalidated because it was contained within the cover letter and not the Agreement itself.  Pattison, 491 Md. at 564-65, 340 A.3d at 224-25.  Regardless of the placement of the condition, the condition was part of Wife’s offer.  Id. at 565, 340 A.3d at 225.  As such, the Court found the condition unambiguous, concluding that a reasonable person would have understood the offer to only be valid if Husband signed the Agreement the day it was presented.  Id. at 565, 340 A.3d at 225.

Second, the Court analyzed traditional contract principles and found that Wife’s silence after receiving Husband’s signed documents did not constitute a waiver of the conditioned deadline in the cover letter.  Pattison, 491 Md. at 566, 340 A.3d at 225.  The Court explained that withdrawal of a condition may be communicated in various ways but cannot appear in the proposed contract itself, as an offeror cannot simultaneously extend and withdraw an offer.  Id. at 564-65, 340 A.3d at 224-25.  Here, Wife communicated the expiration of the offer in advance, through the cover letter.  Id. at 565, 340 A.3d at 225.  Since Husband did not sign the documents until the following Monday, Wife’s offer had already expired.  Id. at 565, 340 A.3d at 225.  Instead, the Court opined that Husband made a counteroffer when he delivered the signed documents to Wife—giving her the power of acceptance.  Id. at 565, 340 A.3d at 225.  As such, Wife’s silence was not a waiver of the condition, but instead a denial of Husband’s counteroffer.  Pattison, 491 Md. at 566, 340 A.3d at 226.  Due to Husband’s failure to adhere to Wife’s deadline, the Court found that no contract was formed between the parties.  Id. at 567, 340 A.3d at 226.

Justice Killough, joined by Justice Eaves, dissented to criticize the majority offer-and-acceptance framework as misplaced.  Pattison, 491 Md. at 570, 340 A.3d at 228.  The dissent argued that the parties had already reached a binding, enforceable agreement and that the majority improperly invalidated this based solely on a condition in a cover letter that had been excluded as inadmissible hearsay.  Id. at 571, 340 A.3d at 228-29.  Further, the dissent rejected the majority’s opinion that Husband’s understanding was irrelevant, noting no evidence that he received notice of the deadline before Friday’s end—viewing the issue as a factual one subject to clear-error review rather than de novo.  Id. at 578-79, 340 A.3d at 233.  Lastly, the dissent found that the majority effectively announced a new rule of contract law that allows courts to disregard a fully executed, integrated settlement agreement, based on contemporaneous extrinsic communications.  Id. at 583, 340 A.3d at 236.

The Pattison decision reaffirms traditional contract principles in Maryland by emphasizing that when a condition precedent is not satisfied, no contract is formed.  By disregarding a seemingly finalized agreement, the majority signals to practitioners the importance of identifying and complying with contractual conditions, since those conditions may determine whether an agreement becomes legally enforceable.  This decision serves as a reminder that failing to satisfy a condition precedent can prevent an otherwise agreed-upon contract from taking effect.

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Katelyn White is a fourth-year evening student at the University of Baltimore School of Law and will serve as the Assistant Managing Editor for Volume 57 of the University of Baltimore Law Forum. Katelyn serves as the President of the Real Estate Law Association and as a student representative for the MSBA Real Property Section. Katelyn also works full time as a law clerk for Semmes, Bowen & Semmes. She earned her Bachelor of Arts in English from Washington & Jefferson College. She expects to graduate May 2027.