Grayson-Robinson Stores, Inc. v. Iris Constr. Corp.

168 N.E.2d 377 (1960)

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Nature of the Case

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Facts

Iris owned vacant land in Levittown and entered into an agreement with Grayson whereby Iris was going to erect a shopping center to be rented to Grayson for use as a retail department store for 25 years with options to renew thereafter. Possession was to be turned over to Grayson on or before September 1, 1957, with time being of the essence. The agreement called for arbitration of all disputes under the AAA rules giving the arbitrator all power to grant any just or equitable relief, including specific performance. After the deal was signed and groundbreaking occurred, Iris informed Grayson that it could not continue with the project because of difficulties in securing mortgage money unless Grayson agreed to an increase in rent. Grayson refused to pay more, and the building was never completed. There was nothing in the agreement relieving Iris of its duties if it could not get mortgage money. At arbitration and in the courts, Iris argued impossibility of performance, but the arbitrators weren’t buying it and ordered Iris to finish the building and honor the terms of the contract. Iris objected to the arbitrator awarding specific performance in that this was a construction contract and such an award would require extensive court supervision. Iris brought the matter before the courts to invalidate the arbitration award.