Where a contractual obligation cannot be performed because one party controls the subject matter, a commercial shopping center, and other remedies for breach will not compensate the non-breaching party, specific performance of a negotiated lease is appropriate.
D was trying to develop a shopping center, but had zoning issues. P was trying to negotiate a lease with D. In the hopes of acquiring a lease in the new shopping center, P's President wrote a letter to be used in a hearing before the zoning board, stating that his store was interested in becoming a tenant in the D;s proposed mall. In return, P received a letter from D offering the chance to become a major tenant. P seeks specific performance of this promise.
Was specific performance an appropriate way to enforce a contract that has certain terms left open for future negotiation?
The court found that there was a binding option to lease and that the lease-option agreement was sufficiently definite and certain, in terms of design, type of construction, and price, to be specifically enforced. Because the contractual obligation being enforced involved more than the mere construction of a building, and the building was to be built on land controlled by its owner (making it impossible for the enforcing party to have the job done by another and charged to the defaulting owner), specific enforcement was entirely appropriate. The court found that there was sufficient evidence of a unilateral contract to satisfy D.C. Code Ann. § 28-3502 (1967), the applicable statute of frauds. In addition, there was an enforceable option, which was more than an offer and was not the same as a bilateral contract. The mere fact that some of the terms were subject to future negotiation did not bar a decree for specific performance.