Case Summary:
The parties filed a stipulation requesting a ruling as a matter of law on three issues: (1) the choice of law to be applied in interpreting the contract; (2) whether the Consent Provision is a condition precedent to the formation and enforceability of the Contract, such that the stipulated failure to obtain the executed Consent rendered the contract null and void; (3) whether Houlihan could unilaterally waive the Consent Provision. The Court held that when the very formation of a contract is at issue, a choice-of-law provision included in the contract does not apply. The Court noted that the 7th Circuit has declined to determine whether bankruptcy courts apply federal or state choice-of-law rules; typically, the same result will be reached. The Court further held that when the entirety of the bargained for services under a contract is conditioned on an event, then the existence of the contract is conditioned on the occurrence of such event. Since one party’s duty to provide services, and the other party’s duty to pay for such services, are both suspended until the occurrence of the event, the party could not unilaterally waive the Consent Provision, since that would be the equivalent of providing an indefinite option contract. Since consideration is required to keep an option contract open, by definition this Consent Provision cannot have been for the sole benefit of Houlihan.