Lucey v. Hero International Corp.

Rule of Law:

An option contract to purchase real estate is not specifically enforceable if an essential term, such as the identity of the property, is left for future mutual agreement. Furthermore, a corporate president lacks the inherent authority to bind the corporation to such an option without express or implied authorization from the board of directors.

Facts:

• Father John P. Lucey offered to purchase five acres of land from a corporation whose president was Henry Rose.
• The corporation's board of directors passed a vote authorizing the sale of a specific five-acre parcel for $65,000 and authorizing Rose to sign documents to effectuate that transfer.
• At the closing for the initial parcel, Lucey executed a sales agreement containing an option to purchase additional land 'as mutually agreed upon by both parties.'
• Rose, without consulting other corporate officers, received the agreement, deleted a phrase describing the general location of the option land, and signed it.
• Lucey later initialed the modified agreement, indicating his assent to the change.
• Subsequently, Lucey unilaterally hired a surveyor to prepare a plan for a five-acre parcel he selected and attempted to exercise the option for that specific parcel.
• Rose, on behalf of the defendant, offered to sell Lucey a different parcel of land, but the parties failed to reach an agreement.

Procedural Posture:

• Father John P. Lucey sued the defendant corporation in a Massachusetts trial court, seeking specific performance of an option to purchase land.
• The case was referred to a master, who made findings of fact.
• The trial court entered an interlocutory decree confirming the master’s report.
• The trial court then issued a final decree ordering the defendant corporation to convey the land to Lucey.
• The defendant corporation (appellant) appealed both the interlocutory and final decrees to the Supreme Judicial Court of Massachusetts.