IN THE UNITED STATES COURT OF APPEALS

FOR THE FIFTH CIRCUIT

No. 14-11059

JACK SONG; NAMMI SONG, 

 Plaintiffs - Appellants

v.

4170 & 4231 & 4271 ALTOONA DRIVE HOLDINGS LIMITED 

PARTNERSHIP, 

 Defendant - Appellee

Appeal from the United States District Court

for the Northern District of Texas

USDC No. 3:13-CV-1822

Before STEWART, Chief Judge, and KING and ELROD, Circuit Judges.

PER CURIAM:*

Plaintiffs-Appellants Jack and Nammi Song appeal the district court’s 

order granting summary judgment in favor of Defendant-Appellee 4170 & 4231 

& 4271 Altoona Drive Holdings Limited Partnership. The Songs seek the 

reversal of the district court’s judgment, which declared that Altoona was 

entitled to the $361,200 deposit made by the Songs arising from an auction for 

* Pursuant to 5TH CIR. R. 47.5, the court has determined that this opinion should not 

be published and is not precedent except under the limited circumstances set forth in 5TH 

CIR. R. 47.5.4.

United States Court of Appeals

Fifth Circuit

FILED

April 8, 2015

Lyle W. Cayce

Clerk

 

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the sale of an apartment complex. The Songs argue that the parties entered 

into a revocable option contract, unsupported by consideration, for the sale of 

the apartment complex. Therefore, the Songs argue that even though they 

revoked their offer on the property, Altoona is not entitled to retain the

$361,200 deposit. Because we hold that the agreement became a binding 

contract, supported by consideration, before the Songs attempted to revoke 

their offer, we AFFIRM the district court’s entry of summary judgment.

FACTUAL AND PROCEDURAL BACKGROUND

Plaintiffs-Appellants Jack and Nammi Song submitted the winning bid, 

in the amount of $3,440,000, during an online auction for the purchase of the

an apartment complex located at 4170, 4231, and 4271 Altoona Drive, Dallas, 

Texas (the “Property”). On February 27, 2013, the Songs executed a Purchase 

and Sale Agreement (the “Agreement”), which initially constituted a bid that 

was to remain open for fifteen business days. On the same day, the Songs 

wired $361,200 as an earnest money deposit for the Property. The Agreement

stated, under the heading “Acknowledgment of Offeror,” that “a binding 

contract between the undersigned and Seller will not be created unless and 

until Seller indicates its acceptance of this bid by executing the attached 

Purchase and Sale Agreement and by delivering a copy thereof to the 

undersigned.” On February 28, 2013, a representative of 4170 & 4231 & 4271 

Altoona Drive Holdings Limited Partnership (“Altoona”) executed the 

Agreement and delivered a copy to the Songs.

Section 12.20 of the Agreement, “Auction Sale/Process,” contains the 

following language:

Seller may select the winning bid in its sole and absolute 

discretion. No obligation to sell shall be binding on Seller unless 

and until this Agreement is countersigned by Seller and, if the sale 

is subject to confirmation as evidenced by an Addendum to 

Purchase and Sale Agreement “Subject To” executed by Seller and 

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Purchaser, Seller has delivered its approval of the sale as required 

in said addendum. Seller may rescind any oral acceptance of a 

winning bid prior to the execution and delivery of this Agreement 

to Purchaser for any reason . . . .”

The Songs and Altoona executed the Addendum to the Purchase and Sale 

Agreement “Subject To” (the “Addendum”). The Addendum included a 

provision that allowed Altoona to “terminate the Agreement, in [Altoona’s] sole 

and absolute discretion, in the event [Altoona] does not approve the sale.” The 

Addendum further provided that Altoona “shall make such election within 

fifteen . . . business days . . . following the Effective Date of the Agreement,”

and if Altoona “elects NOT to approve the transaction and elects to reject the 

Agreement” the Songs were entitled to a refund of their deposit. In the event 

that the Song’s defaulted on their obligations under the Agreement, Section 

10.2 entitles Altoona to retain the Songs’ deposit as liquidated damages.

On March 5, 2013, the Songs informed Altoona that they would not 

complete the purchase of the Property and demanded the return of their 

deposit. On March 21, 2013, Altoona delivered a letter to the Songs confirming 

that Altoona approved the sale of the Property and that the closing date would 

be April 11, 2013. The Songs refused to close on the Property on April 11, 2013. 

On April 16, 2013, the Songs filed suit against Altoona in the 134th 

District Court, Dallas County, Texas, seeking both a declaratory judgment 

establishing that they had the right to revoke their offer to purchase the 

Property and recovery of their deposit. Altoona removed the case to the United 

States District Court for the Northern District of Texas and filed a 

counterclaim for breach of contract. On April 22, 2014, the district court 

entered an order granting summary judgment for Altoona. After their motion 

for reconsideration was denied by the district court, the Songs filed a timely 

notice of appeal.

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STANDARD OF REVIEW

We review a district court’s grant of summary judgment de novo, 

applying the same standard that was applied below. Rogers v. Bromac Title 

Servs., L.L.C., 755 F.3d 347, 350 (5th Cir. 2014). Summary judgment is proper 

“if the movant shows that there is no genuine dispute as to any material fact 

and the movant is entitled to judgment as a matter of law.” Fed. R. Civ. P. 

56(a). “The interpretation of a contract . . . is a question of law, which we 

review de novo.” McLane Foodservice, Inc. v. Table Rock Rests., L.L.C., 736 

F.3d 375, 377 (5th Cir. 2013). 

DISCUSSION

Under Texas law, a valid contract consists of the following six elements:

(1) an offer, (2) acceptance in strict compliance with the terms of 

the offer, (3) meeting of the minds, (4) a communication that each 

party consented to the terms of the contract, (5) execution and 

delivery of the contract with intent it become mutual and binding 

on both parties, and (6) consideration. 

Expro Ams., LLC v. Sanguine Gas Exploration, LLC, 351 S.W.3d 915, 920 (Tex.

App.––Houston [14th Dist.] 2011, pet. denied). At issue here are the second 

and sixth elements. The Songs argue that the Agreement is a revocable option 

contract unsupported by independent consideration. However, the language 

of the Agreement forecloses such an interpretation. 

The Agreement is fulsome and explicit. It establishes “that a binding 

contract between the [Songs] and [Altoona] will not be created unless and until 

[Altoona] indicates its acceptance of this bid by executing the attached 

[Agreement] and delivering a copy thereof to the [Songs].” A representative 

executed and delivered a copy of the Agreement to the Songs on February 28, 

2013. A binding contract was thereby created. Further, the language of the 

Addendum makes clear that Altoona can “terminate” the Agreement during 

the fifteen day period following the effective date of the Agreement. If, as 

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argued by the Songs, the Agreement allows them as a matter of law—albeit 

not explicitly spelled out in the Agreement—to withdraw their offer at any time 

during that period, the Agreement’s provision of those fifteen days for Altoona 

to “approve the sale” would be illusory because the Songs could opt out at any 

time. We hesitate to construe the Agreement as a matter of law in a way that 

renders an explicit provision of the Agreement illusory.

Making another run at it, the Songs argue that section 12.20 of the 

Agreement establishes a second condition precedent to the formation of a 

binding contract––namely, Altoona’s delivery of a separate written approval of 

the sale. However, section 12.20 only deals with Altoona’s “obligation to sell” 

the Property. It does not address, and therefore does not modify, the Songs’ 

obligation to hold their bid open for the fifteen days contemplated by the 

Addendum. Further, it does not address the parties’ power of acceptance, 

which is explicitly covered in the Agreement itself. Therefore, once Altoona 

executed the Agreement and delivered it to the Songs on February 28, 2013, 

all of the covenants under the contract became binding by the explicit terms of 

the Agreement. See Advantage Physical Therapy, Inc. v. Cruse, 165 S.W.3d 21, 

26 (Tex. App.––Houston [14th Dist.] 2005, no pet.) (“To form a binding contract, 

the party to whom the offer is made must accept such offer and communicate 

such acceptance to the person making the offer.”).

Furthermore, the Agreement is supported by consideration. “It is quite 

elementary that the promise of one party is a valid consideration for the 

promise of the other party.” Tex. Farm Bureau Cotton Ass’n v. Stoval, 253 S.W. 

1101, 1105 (Tex. 1923). In exchange for the Songs’ promise to allow Altoona to 

“terminate the Agreement, in [Altoona’s] sole and absolute discretion, in the 

event [Altoona] does not approve the sale,” Altoona promised to accept the 

highest bid submitted during the auction, which was the Songs’ bid. Altoona’s 

acceptance of the Songs’ bid was sufficient consideration to support the 

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existence of a valid contract. Cf. Sedona Contracting, Inc. v. Ford, Powell & 

Carson, Inc., 995 S.W.2d 192, 197 n.1 (Tex. App.––San Antonio 1999, pet. 

denied) (“We agree . . . that consideration was given when the NEISD accepted 

Sedona’s bid for consideration and evaluation.”).1 Altoona also promised to 

keep the Property insured against fire and other hazards and to maintain the 

Property in good condition while the Agreement was in force. These promises 

provided additional consideration for the Agreement. See Rice v. Metro. Life

Ins. Co., 324 S.W.3d 660, 670 (Tex. App.––Fort Worth 2010, no pet.) 

(“[V]aluable and sufficient consideration for a contract may consist of . . . a loss 

or detriment to the promisee.”). As such, even if Altoona had ultimately 

terminated the Agreement, Altoona would have been bound in the interim––

bound to accept the Songs’ bid (as the highest), bound to insure the Property, 

and bound to maintain the Property. While these obligations may not be 

commensurate to the Songs’ obligation to purchase the Property, “Texas law 

does not require that every right or obligation by one party be met with an 

identical right or obligation in the other.” Riner, 131 F.3d at 536 (citing Howell 

v. Murray Mortg. Co., 890 S.W.2d 78, 87 (Tex. App.—Amarillo 1994, writ 

denied)). 

The Songs’ citation to Hott v. Pearcy/Christon, Inc., 663 S.W.2d 851 (Tex. 

App.––Dallas 1983, writ ref’d n.r.e.), does not change our conclusion. There, 

the court examined a purported contract for the sale of property with a 

provision that limited the buyer’s “liability under the contract to the forfeiture 

of his earnest money.” Id. at 853. The court explained that “[w]hile generally 

the mutual promise to buy and sell are sufficient to create a binding contract 

1 In any event, Altoona’s right to terminate the Agreement “at its option did not render 

the contract void or unenforceable when [Altoona] did not, in fact, exercise that option, but 

instead embarked upon performance” by accepting the Songs’ bid. Cf. Riner v. Allstate Life 

Ins. Co., 131 F.3d 530, 536 (5th Cir. 1997). 

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to convey land, they are not sufficient when the buyer’s liability is limited to 

forfeiture of his earnest money.” Id. The court further explained that “[t]he 

effect of limiting liability results in an option to purchase, revocable at the will 

of the seller, unless and until an independent consideration is paid.” Id. Here, 

as described above, there was consideration supporting the Agreement beyond 

the parties’ mutual promises to buy and sell the Property. Therefore, even if 

we were to label the Agreement an option contract, it is supported by 

consideration and would still prevent the Songs’ from revoking their bid during 

the fifteen day period contemplated by the Addendum. The Songs also cite to 

Echols v. Bloom, 485 S.W.2d 798 (Tex. App.––Houston [14th Dist.] 1972, writ 

ref’d n.r.e.); however, that case is inapposite. In Echols, the court confronted a 

situation where “the absence of consideration rendered the option 

unenforceable.” Id. at 800. Here, there was consideration for the Agreement, 

which became a binding contract when it was executed and returned by 

Altoona on February 28, 2013.

Finally, we hold that the district court was correct when it found that 

Altoona was entitled to the Songs’ deposit as liquidated damages. Under Texas 

law, “[a] liquidated damages stipulation is valid if it is reasonable and the 

actual damages are uncertain.” Enclave, Inc. v. Resolution Trust Corp., 986 

F.2d 131, 134 (5th Cir. 1993) (citing Stewart v. Basey, 245 S.W.2d 484, 486 

(Tex. 1952)). In fact, “[it] has been held, time and again, that a provision for 

liquidated damages in a contract for the sale and purchase of real estate is 

proper as being a transaction in which the damages for the breach thereof are 

uncertain and not easily estimated with accuracy.” Id. (quoting Zucht v. 

Stewart Title Guar. Co., 207 S.W.2d 414, 419 (Tex. Civ. App.––San Antonio 

1947, writ dism’d)). We conclude that the liquidated damages provision is 

reasonable and actual damages were uncertain. Accordingly, because the

Songs breached the agreement by refusing to close on the Property, the district 

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court correctly held that Altoona is entitled to the deposit as liquidated 

damages. 

CONCLUSION

For the foregoing reasons, the judgment of the district court is 

AFFIRMED. 

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