Sulzberger v. Steinhauer - 235 Mich. 253, 209 N.W. 68 (1926)

Rule:

Consideration for an option may be nominal.

Facts:

The parties' written agreement gave the vendee an option to purchase farm property, at $ 1,500 per acre, upon a downpayment of $ 200 within 90 days, and other terms with respect to the balance. The stated consideration for the option was one dollar, which was tendered but refused by one vendor. The vendee agreed when the vendor subsequently wrote that he wanted to substitute a certain reservation in the agreement. After the vendee exercised the option by giving a check for the $ 200 downpayment, the vendors returned the check, stating that they decided not to sell. Consequently, the vendee sued to compel the vendors to proceed with the sale. A decree was entered against the vendors, and they appealed.

Issue:

Under the circumstances, could the vendors be compelled to proceed with the sale, notwithstanding the nominal consideration for the option? 

Answer:

Yes.

Conclusion:

In affirming, the court ruled that the record showed no fraudulent misrepresentations, and the modification of the option with respect to the reservation did not annul the agreement or release the vendors from performance except as to the reserved parcel. The court held that the nominal one-dollar consideration for the option was adequate and its tender bound the vendors, even though it was refused. The purchase price was also adequate consideration, and the description of the land was sufficient.