Any money consideration, however small, paid and received for an option to purchase property at its adequate value is binding upon the seller thereof for the time specified therein, and is irrevocable for want of its adequacy.
In consideration of 25 cents, the optionee was given an option to purchase, for the sum of $ 100,000, certain real estate owned by the optionor. The optionee was given until June 1 to exercise the option. On June 1, the optionee exercised the right of extension given in the option. The next day the optionor revoked the option. On June 29, the optionee left a letter at the optionor's residence indicating his tender of $ 30,000 and filed an action for specific performance of the option contract for the purchase of real estate. The Superior Court issued judgment for the optionor. The optionee appealed the decision of the Superior Court.
Is a small amount consideration adequate for an option contract to be binding?
The court affirmed the judgment for the optionor. The trial court erroneously concluded that 25 cents was insufficient consideration for the option contract because any consideration paid and received for an option to purchase property at its adequate value was binding upon the seller for the time specified therein, and was irrevocable for want of its adequacy. Thus, the optionor's attempted revocation of the option failed. However, judgment was still proper for the optionor because the optionee did not comply with the terms of acceptance for purchase of the land.