Rego v. Decker
Rego v. Decker
FACTS: Rego and his wife leased land with a service station on it to appelle Robert Decker for one year. Under the lease Decker was given an option to renew for 4 years on the same terms except that the minimum rent would be increased. The lease also included an option to purchase. The Regos were supposed to pave the grounds of the service station but they never did. In 1967 Decker notified the Regos that he was exercising his option to purchase the property, and demanded a warranty deed and title insurance policy within 30 days. The Regos did not comply with Decker’s demand, and conveyed the property instead to others, who took with notice of Decker’s interest.
ISSUE: Were the terms of this contract uncertain?
RULE: Courts should fill in the terms where the intentions of the parties are reasonably clear, you cannot do this when it is uncertain. However, if there is RELIANCE, you can.
- Where the character of a gap in an agreement manifests failure to reach an agreement rather than a sketchy agreement, or where gaps cannot be filled with confidence that the reasonable expectations of the parties are being fulfilled, then specific enforcement should be denied for lack of reasonable certainty.
- Even though one or more terms are left open, a contract does not fail for indefiniteness if the parties intended to make a contract and there is a reasonably certain basis for giving an appropriate remedy.
ANALYSIS: When a contract is specific enough to be enforced. It dealt sensitively with the distinction between a judge making up the contract, and a judge filling gaps as the parties would have had they had the time and money to draw up a more complete document.
CONCLUSION: In the circumstances of this case, specific performance on the Regos’ part should not have been required without conditioning such performance on the giving of security by Decker for his performance. In granting specific performance, the decree can be fashioned to provide that the plaintiff furnish adequate security for his agreed performance. In so doing, the courts are fulfilling their function of achieving justice between parties. Trial court was correct in granting Decker specific performance of the purchase option agreement, we further hold that the court’s decree should have been made conditional upon Decker’s either paying the purchase price in full or furnishing adequate security embodying the terms as the court considered appropriate.