Opinion ID: 2001288
Heading Depth: 1
Heading Rank: 4

Heading: was the option to purchase void because it was an integral part of the invalid lease agreement between christensens and carrie martin?

Text: Even though the extended lease contained in the Addendum violated South Dakota law, Christensens argue the option to purchase is enforceable because it can be severed from the invalid portion of the contract. Christensens point to statutory authority for the divisibility of contracts: Where a contract has several distinct objects, one or more of which are lawful and one or more of which are unlawful in whole or in part, the contract is void as to the latter and valid as to the rest. SDCL 53-5-4. See also 1st American Systems, Inc. v. Rezatto, 311 N.W.2d 51 (S.D.1981) (stating so long as an illegal covenant is divisible, the remaining legal covenants are enforceable) (citations omitted). The trial court determined that the option to purchase was void because it could not be severed from the invalid lease provision. Whether an agreement is severable rests on two preliminary requirements: (1) the parties' performances must be separable into corresponding pairs of part performances and (2) the parts of each pair must be regarded as agreed equivalents. E. Allen Farnsworth, Contracts, § 5.8 at 382 (2nd ed. 1990); Restatement (Second) of Contracts § 183 (1979). [2] Stated another way, a distinguishing mark of a divisible contract is that the consideration is not single, but can be apportioned to correspond with separate consideration offered by the other party. City of Lansing v. Township of Lansing, 356 Mich. 641, 97 N.W.2d 804, 813 (1959); Anderson v. Kammeier, 262 N.W.2d 366, 371 (Minn.1977) (citing 6 Williston, Contracts § 860 (3rd ed. 1962)); Gaspar v. Flott, 209 Neb. 260, 307 N.W.2d 500, 503 (1981). Here, the option and the lease are not supported by distinct consideration. Christensens note that the Addendum increased the purchase price on the land by $1,000. They argue that this $1,000 increase constitutes separate consideration for the option. We disagree. Christensens did not promise to pay the $1,000 in exchange for the option. Christensens only promised to pay the additional sum if they chose to exercise the option. As the trial court aptly noted, the only consideration tendered by Christensens was payment on the lease, which could also be applied toward the purchase price if they chose to exercise the option. The option itself was not supported by any additional consideration. Therefore, when the lease was declared unenforceable, there was no separate consideration to support the continuation of the option. The trial court properly ruled the contract was not divisible and the option was void.