Store Properties, Inc. v. Neal

72 Cal. App. 2d 112, 164 P.2d 38 (1945)

 

RULE:

Even though a contract expressed in general terms might not be void and although it might be the basis of an action for damages, yet it may be entirely too loose and inexact to warrant a decree for specific performance. Where a contract appears to be a preliminary agreement embodying only the spirit of a contemplated supplementary contract and it is perfectly clear that the minds of the parties never met upon the details then it is not enforceable. When it is the understanding that the terms of a contract are to be reduced to writing and signed by the parties, assent to its terms must be evidenced by a writing subscribed by all of them; otherwise it does not become a completed contract. When only the principal provisions of a lease are agreed upon, leaving the details and conditions to be expressed in a writing to be executed by the parties, and such writing is never signed by those to be charged, it never becomes a binding obligation upon either.

FACTS:

Defendant offerors, as proposed lessors of real property, sent a written letter offer to plaintiff acceptor, as the proposed lessee of the real property. Plaintiff contended that the offer and acceptance of the offer constituted a valid binding contract for the lease. The trial court sustained defendants' demurrer to plaintiff's second amended complaint for specific performance. The appellate court affirmed the trial court's order.

ISSUE:

Was there a valid binding contract of lease between defendant offerors and plaintiff acceptor?

ANSWER:

No.

CONCLUSION:

The court affirmed the order that sustained defendant offerors' demurrer to plaintiff acceptor's second amended complaint for specific performance on four grounds. First, the offer and acceptance did not constitute an enforceable contract for the lease. Second, the letter was part of the negotiations to enter into a lease within 30 days. Third, the parties contemplated that the execution and delivery of a formal lease was a necessary act toward the culmination of the proposed lease transaction. Finally, the letter did not include critical terms such as the type of building to be constructed.

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