Ammerman v. City Stores Co.
394 F.2d 950 (1968)
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Rule of Law:
A promise to lease property on terms 'at least equal to' those offered to other tenants creates a binding and specifically enforceable option contract if supported by consideration. A court may grant specific performance of such a contract, even if some details are left for future negotiation, by using the terms of the other leases as an objective standard to ensure equality.
Facts:
- Builders and developers Gudelsky and Lerner sought to rezone a tract of land in Fairfax County for a shopping center, but their application faced opposition from the county planning commission.
- The builders asked Jagels, the president of City Stores Company's Lansburgh's Department Store, for a letter expressing Lansburgh's preference for their site over a rival developer's site.
- In exchange for this support, the builders provided Jagels with a signed letter assuring Lansburgh's that if the zoning application was successful, they would give Lansburgh's 'the opportunity to become one of our contemplated center’s major tenants with rental and terms at least equal to that of any other major department store in the center.'
- Lansburgh's, eager to expand into the suburbs, provided the requested letter of support.
- The builders used Lansburgh's letter at the rezoning hearing and were successful in getting the property rezoned.
- In 1965, the builders entered into lease agreements with two other major department stores, Woodward & Lothrop and Hecht.
- The builders subsequently refused to offer a lease to Lansburgh's.
Procedural Posture:
- City Stores Company sued the builders of Tyson’s Corner Shopping Center in the U.S. District Court for the District of Columbia.
- The plaintiff, City Stores, sought a decree of specific performance to compel the builders to grant it a lease.
- The District Court judge found that the builders had given City Stores a binding option to lease and that the agreement was sufficiently definite to be specifically enforced.
- The District Court entered a judgment in favor of City Stores, ordering the builders to grant a lease on terms equal to those of another major tenant.
- The builders, as appellants, appealed the District Court's decision to the U.S. Court of Appeals for the D.C. Circuit, with City Stores as the appellee.
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Issue:
Does a developer's written promise to offer a department store a lease with terms 'at least equal to that of any other major department store in the center,' given in exchange for the store's assistance in a zoning application, create a specifically enforceable option contract?
Opinions:
Majority - Per Curiam
Yes, the developer's written promise created a specifically enforceable option contract. The court held that Lansburgh's letter of support constituted adequate consideration, forming a valid unilateral contract that gave Lansburgh's an option to lease a space. The contract was not too indefinite to be enforced because the terms were to be based on an objective, ascertainable standard: the leases of the other major tenants. The court reasoned that specific performance was the only adequate remedy, as monetary damages would be impracticable to calculate and could not compensate for the loss of the unique business opportunity and the chance to improve Lansburgh's public image. The existence of the other leases provided a sufficient blueprint for the court to fashion a remedy with little difficulty of supervision.
Analysis:
This case is significant for its flexible approach to the contract doctrine of definiteness, particularly in complex commercial agreements. It establishes that a contract is not unenforceably vague if its terms can be determined by reference to an objective, external standard, such as the terms given to third parties. The decision demonstrates a judicial willingness to grant specific performance, even for construction contracts which courts are traditionally reluctant to supervise, when the remedy at law is inadequate and the equities favor the plaintiff. This ruling provides greater certainty for parties who rely on promises of future opportunities contingent on external benchmarks.
