LaPorte v. Blum
Unofficial (2015)
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Rule of Law:
A written option contract that recites nominal consideration is enforceable and irrevocable for its term, even if the consideration was not actually paid. Additionally, other forms of consideration, such as a bargained-for commitment to continue a family business, are sufficient to support an option contract.
Facts:
- Lawrence and Ruth Burgess ('the Grandparents') owned land with a sugaring operation but decided to stop running it in 2001 due to their age.
- In 2004-2005, their grandsons, William and James LaPorte, revived the operation, investing approximately $52,000 in new equipment.
- The LaPortes informed their Grandparents that they would not continue the sugaring operation without an assurance that they could remain on the property long-term.
- The Grandparents' other children (the Defendants) were unhappy with the LaPortes running the operation.
- In May 2006, the Grandparents deeded the land to their five children but granted the LaPortes a written option to purchase the land for $400,000, exercisable within nine months of their deaths. The option document recited consideration of 'Ten Dollars.'
- Both Grandparents passed away in 2013.
- In June 2013, the Defendants sent a letter to the LaPortes attempting to revoke the option.
- In September 2013, the LaPortes sent a letter to exercise the option.
Procedural Posture:
- William LaPorte, James LaPorte, and Burgess Sugarhouse, LLC filed a lawsuit against Pamela Blum and other family members in the Vermont Superior Court, Chittenden Unit, Civil Division.
- The plaintiffs sought to enforce an option to purchase real estate.
- The defendants filed a counterclaim seeking a declaratory judgment that they had properly revoked the option.
- A court trial was held before the Superior Court Judge.
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Issue:
Is a written option contract, which recites nominal consideration that was never actually paid, enforceable and therefore irrevocable for its stated term?
Opinions:
Majority - Toor, J.
Yes. A written option contract reciting nominal consideration is enforceable and irrevocable. The court adopts the modern approach of the Restatement (Second) of Contracts § 87, which states that an option agreement is not invalidated by proof that recited consideration was not actually given. This approach honors the parties' intent, as it is common practice to recite nominal consideration without expecting payment. Furthermore, even if the recited consideration were insufficient, the option was supported by other valuable consideration: the LaPortes' commitment to continue the family's sugaring operation. This continuation was highly valued by the Grandparents and was bargained for in exchange for the option. Because the option was supported by consideration, it was an irrevocable offer that could not be withdrawn by the Defendants during its term. Therefore, the LaPortes' exercise of the option was valid and created a binding contract.
Analysis:
This decision illustrates a court's willingness to adopt the modern Restatement view on contract law in the absence of controlling state precedent, prioritizing the parties' intent over formalistic requirements. It affirms that the recital of nominal consideration in an option contract can create a binding, irrevocable offer, providing certainty for parties relying on such agreements. The court's alternative holding also reinforces the broad definition of consideration, recognizing that a non-monetary commitment, like continuing a family enterprise, constitutes legally sufficient value to support a contract. This case provides a clear example of how courts may find consideration to uphold an agreement that reflects the clear wishes of the original parties.
