Bettancourt v. Gilroy Theatre Co., Inc.
261 P.2d 351, 120 Cal. App. 2d 364, 1953 Cal. App. LEXIS 1947 (1953)
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Rule of Law:
A contractual term that appears indefinite on its face, such as an agreement to build a 'first-class theatre,' may be rendered sufficiently certain to be enforceable in an action for damages by introducing extrinsic evidence of the parties' intent and the surrounding circumstances.
Facts:
- On February 12, 1947, Alfred and Clara Bettancourt agreed to sell a parcel of land in Gilroy to the Gilroy Theatre Company, Inc.
- The sales agreement included a provision requiring the Gilroy Theatre Company to erect a 'First class Theatre' on the property as soon as materials became available at reasonable prices.
- The Bettancourts, who owned other properties on the same block, were induced to sell by the prospect that a new theater would enhance the value of their remaining holdings.
- Around March 5, 1947, the Bettancourts conveyed the land to the Gilroy Theatre Company in exchange for the purchase price of $16,842.
- The Gilroy Theatre Company never constructed a theater on the property.
- On August 2, 1950, the Gilroy Theatre Company sold the vacant land to a third party for $24,000.
Procedural Posture:
- Alfred R. Bettancourt and Clara H. Bettancourt filed suit against Gilroy Theatre Company, Inc. in a California trial court, seeking damages for breach of contract.
- At trial, after the Bettancourts presented their case, the trial court granted Gilroy Theatre Company's motion for a nonsuit.
- The trial court entered a judgment of nonsuit in favor of the defendant, Gilroy Theatre Company.
- The plaintiffs, the Bettancourts, appealed the judgment of nonsuit to the intermediate appellate court.
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Issue:
Is a contractual promise to erect a 'First class Theatre' sufficiently definite and certain to be enforceable in an action for damages?
Opinions:
Majority - Wood, J.
Yes. A contractual agreement to erect a 'First class Theatre' is sufficiently definite and certain to form the basis for a contractual obligation in an action for damages. The law leans against the destruction of contracts due to uncertainty and favors an interpretation that carries out the reasonable intentions of the parties. A term is considered certain if it can be made certain through extrinsic evidence, which does not add new terms but rather clarifies the parties' expressed intentions. Here, testimony from both parties indicated a shared understanding of what a 'first-class theatre' in Gilroy would entail, referencing local building codes, the quality of other local theaters, and even preliminary architectural drawings. The court also noted that a greater degree of certainty is required for specific performance than for an action for damages; since the defendant made performance impossible by selling the land, an action for damages is appropriate and the standard of certainty is met.
Analysis:
This decision reinforces the judicial principle of favoring the enforcement of contracts by allowing extrinsic evidence to clarify seemingly ambiguous terms. It establishes that terms like 'first class' are not per se unenforceable if their meaning can be ascertained from the context of the agreement, industry standards, and the parties' own understandings. The case also highlights the important distinction between the high level of certainty required for specific performance and the more lenient standard applied in actions for damages. This precedent allows courts greater flexibility to prevent a party from escaping a contractual obligation by claiming a term is too vague after receiving the benefit of the bargain.
