JMR, Inc. v. Hedderly

STEPHENS, J. On July 10, 1965 John M. Roach signed a document prepared by a business broker entitled: 11 Offer and Deposit on Sale of Business.” The document constituted a purported offer on the part of Mr. Roach “or Corporate Nominee” to purchase from defendants (owners of a master lease) a restaurant and cocktail bar business, and to give a 12-year sublease of the premises on South Western Avenue in the City of Los Angeles. The purchase contract provides, among other things: (1) that the purchase is “Subject to buyers receiving a sub-lease of the premise at the terms of $450 per month for 5 years; $475 per month for 4 years; $500 per month for 3 years; subject to buyers approval”; (2) that the unpaid balance of the purchase price is to be secured by a “pledge of the corporate stock”; (3) that the purchaser is John M. Roach or corporate nominee. The offer was accepted by defendants. On July 22, 1965 and subsequent to the date of [146]defendants’ acceptance, Roach sent a letter to the defendants. By this letter, Roach sought to exercise his right of nomination, and named the plaintiff as nominee purchaser of the business. Escrow was opened by plaintiff, and the defendants refused to go through with the escrow. Plaintiff filed its action seeking specific performance and damages. Defendants demurred, and the demurrer was sustained with leave to amend. Plaintiff amended, dropping the prayer for specific performance. Defendants answered the amended complaint, and at the time of trial moved to dismiss on the ground that the complaint failed to state a cause of action.1 The motion was granted. This appeal is from the order of dismissal.

The sole question on this appeal is whether the terms of the agreement discussed above were sufficiently definite to constitute a contract. The defendants contend that indefiniteness on three separate grounds prevents the agreement from constituting a binding contract. They contend: (1) the parties left to future negotiations the terms of a sublease for the premises' on which the business stood, and that in the absence of finalization of the terms of the sublease, no contract resulted; (2) the terms of the security pledge of the corporate stock to secure the balance of the purchase price were too indefinite to constitute a final agreement; (3) a contract allowing Mr. Roach to choose a corporate nominee to be the purchaser is “indefinite, uncertain, unilateral and a nullity.” We do not agree with defendants; the contract cannot be said to be too indefinite as a matter of law.

The Sublease