Yorkridge Service Corp. v. Boring

Thompson, J., delivered the opinion of the Court. Yorkridge Service Corporation (Yorkridge), the appellant, sought to enforce a first refusal option against Weldon Lee Boring and Gwendolyn Richards Boring, his wife, (the Borings), the appellees, in the Circuit Court for Howard County, Judge Guy Cicone presiding. The chancellor granted the Borings’ motion for summary judgment and denied ⁶²⁵ Yorkridge the relief sought. The case turns upon the question of whether or not Yorkridge properly exercised its option.

The record shows that by agreement dated May 26, 1975, and executed June 2, 1975, the Borings granted Yorkridge a first refusal option to purchase a tract of land known as Section III of Gwenlee Estates. The pertinent portion of the option provided: “If anytime during the term of this First Refusal Option we shall receive a bonafide offer to purchase the Section III Land or any part thereof (‘other offer’), we shall forthwith forward to you a copy of such ‘other offer’ containing all of the terms and conditions of purchase. If within 7 days from the date of your receipt of such ‘other offer’, you give us written notice of your intention to purchase that portion of Section III Land covered by such ‘other offer’ upon the same terms and conditions contained in such ‘other offer’ then such ‘other offer’ together with your written notice of intention to purchase shall serve as a binding agreement between us, subject to such changes and modifications that may be mutually agreed upon.” On January 4, 1976, the Borings received an offer to purchase Lots 1 to 28 of Section III from Development Technology, Inc. for the sum of $224,000. Yorkridge received notice of this offer from the Borings on or about January 17, 1976 but requested and received an extension of time to exercise its option until its counsel, who was abroad, returned to the United States.

Upon his return, Yorkridge’s counsel, Isaac M. Neuberger, sent a letter to the appellees on January 29, 1976, which in pertinent part stated: “In accordance with our brief telephone conversation, I am enclosing herewith an Amendment to Agreement of Sale to the Development Technology, Inc. Contract of Sale which I prepared in accordance with the terms of the First Refusal Option dated May 25, 1975. I have reduced the purchase price by the brokerage ⁶²⁶ commission, since this is a savings as a result of our having exercised our option.” “The Amendment to Agreement of Sale” enclosed was an unexecuted document which purported to reduce the purchase price by $11,200, the amount equal to the savings the Borings would realize on the real estate brokerage commission by virtue of the sale to Yorkridge rather than to Development Technology, Inc., leaving a total purchase price of $212,800. The law as to what constitutes a proper acceptance of an option insofar as here relevant was succinctly set out in 1 Willison on Contracts, § 79 (3rd ed. 1957) at 261-62: “Frequently an offeree, while making a positive acceptance of the offer, also makes a request or suggestion that some addition or modification be made. So long as it is clear that the meaning of the acceptance is positively and unequivocably to accept the offer whether such request is granted or not, a contract is formed.

So an inquiry as to the meaning of an offer, or a request for an explanation, will not invalidate a positive acceptance; nor will a request for a modification of the offer coupled with an unqualified acceptance not dependent on the granting of the request.” (footnotes omitted) We entirely agree with the holding of the trial judge that Yorkridge’s letter of January 29, 1976, constituted a counter-offer rather than an acceptance. In arguing to the contrary, Yorkridge cites that portion of the language in the option which states that the written notice of intention to purchase will serve as a binding agreement “subject to such changes and modifications that may be mutually agreed upon.” It argues that by including that language in the agreement, proposals for amendments were invited and that its letter was simply following the terms of the agreement. We think the argument begs the question. Any agreement is subject to such changes and modifications to which the parties may mutually agree.

It assumes that the option had first been accepted and we see no language in the letter by ⁶²⁷ which it is stated unequivocally that the option had been accepted. To overcome this hurdle Yorkridge points