Agreement. In 2000, David and Sandra Harless leased 2.3 acres of real property at 2801 River Road S.E. in Winnabow, North Carolina, to Tony and Jeanie Connor. The Connors planned to operate a "general store/variety store" on the premises. They agreed to

Question

lease the property for sixty months with an option to renew for an additional sixty months. The lease included an option to buy the property for "fair market value at the time of such purchase (based on at least two appraisals)." In March 2003, Tony told David that the Connors wanted to buy the property. In May, Tony gave David an appraisal that estimated the property's value at $140,000. In July, the Connors presented a second appraisal that determined the value to be $160,000. The Connors offered $150,000. The Harlesses replied that "under no circumstances would they ever agree to sell their old store building and approximately 2.5 acres to their daughter . . . and their son-in-law." The Connors filed a suit in a North Carolina state court against the Harlesses, alleging breach of contract. Did these parties have a contract to sell the property? If so, what were its terms? If not, why not?

Answer 1

Agreement
The Harlesses filed a motion for summary judgment, which the court granted. The Connors appealed to a state intermediate appellate court, which affirmed the lower court's judgment. The appellate court noted that the Harlesses questioned "whether a price term was physically present in the agreement and whether that written price was the amount actually negotiated and agreed upon by the parties to the agreement." The court pointed out that a contract "must specify all its material and essential terms, and leave none to be agreed upon as a result of future negotiations." In this case, if the Connors wanted to exercise the lease's option to buy, the price was the property's "fair market value at the time of such purchase (based on at least two appraisals)." There was, however, no provision for proceeding if the appraisals produced "vastly different property values," which is what occurred: the Connors' appraisals differed by $20,000. Thus "the price term is not, as it must be, certain and definite. . . . Because there was no meeting of the minds as to the essential term of price, the agreement between plaintiffs and defendants is not an enforceable contract."