Goodwest Rubber Corp. v. Munoz

Opinion

RICKLES, J.

The trial court entered summary judgment in favor of Genaro Munoz (defendant) and against Goodwest Rubber Corporation, (plaintiff). We reverse.

Facts

On October 16, 1978, plaintiff and defendant entered into a written option agreement. Plaintiff leased defendant’s property for five years with an option to buy at “fair market value.” This agreement was extended. Plaintiff sought to exercise its option within the extension period by tendering to defendant $80,000. Defendant rejected this offer. Plaintiff filed a complaint seeking, among other things, specific performance of the option agreement. Defendant moved for summary judgment asserting that a price term of “fair market value” is so indefinite and uncertain an action for specific performance would not lie as a matter of law. The trial court granted the summary judgment motion.

Discussion

We are presented with a single issue for review: Was a price designation of “fair market value” definite enough to support an action for specific performance?

[921]

This precise issue has not been resolved in California. However, text writers and courts in other jurisdictions are in general agreement that “fair market value,” “reasonable value,” or “current market value,” are sufficiently certain price terms to support specific performance of an option. (See, e.g.,

Miller

v.

Bloomberg

(1975) 26 Ill.App.3d 18 [324 N.E.2d 207, 208];

Portnoy

v.

Brown

(1968) 430 Pa. 401 [243 A.2d 444, 447-448]. See also

Hanna

v.

Bauguess