Court Opinion

ID: 9558092
Source: CourtListenerOpinion
Date Created: 2023-08-21 17:02:48.733139+00
Date Added: 2024-06-11T09:08:18.925460
License: Public Domain

Brachtenbach, C.J.
(dissenting) — I agree with the Court of Appeals that:
The sole issue we must decide is whether the lessee corporation's offer to purchase, which was conditioned upon the sale of the residence of an unspecified principal shareholder of the lessee corporation, was "in accordance with the terms of" the third party’s offer to purchase, which was conditioned upon the sale of the third party's residence.
Northwest Television Club, Inc. v. Gross Seattle, Inc., 26 Wn. App. 111, 115, 612 P.2d 422 (1980). Because I conclude that the lessee's offer was not "in accordance" with the first offer but rather constituted a counteroffer which the lessor was not bound to accept, I dissent.
The majority correctly concludes that the original offer was acceptable to the lessor. As required by the lease, lessor informed lessee of the offer's acceptability and of the lessee's resulting "exclusive right to purchase the property in accordance with [its] terms". It is axiomatic that when a contract provides for an option to purchase effective upon receipt of notice, that the act of notification activates the lessee's right. Chournos v. Evona Inv. Co., 97 Utah 335, 93 P.2d 450, rehearing denied, 97 Utah 346, 94 P.2d 470 (1939); 51C C.J.S. Landlord and Tenant § 88(3) (1968). The majority's discussion of the acceptability of conditional offers (majority opinion, at 979-80) is therefore confusing5 *987and unnecessary.
Our analysis should focus instead on the validity of the lessee's attempted exercise of its first refusal right. Said right in this case was to purchase the leased property "in accordance with the terms” of the Dor lands' offer, which was conditioned on the sale of their Mercer Island home within 90 days. The lessee notified the lessor that it wished to purchase the property for $90,000 but conditioned payment on the sale of a different residential property in Seattle, owned by the corporation's principal shareholder, within the same time period.
As the majority and the Court of Appeals noted, general contract law governs the exercise of the right of first refusal. Majority opinion, at 980. Northwest Television Club, Inc. v. Gross Seattle, Inc., supra at 116-17. For an offer and acceptance to constitute a contract, acceptance must meet and correspond with offer in every material respect. Northwest Properties Agency, Inc. v. McGhee, 1 Wn. App. 305, 462 P.2d 249 (1969). Purported acceptances which vary materially act instead as counteroffers. Roslyn v. Paul E. Hughes Constr. Co., 19 Wn. App. 59, 573 P.2d 385, review denied, 90 Wn.2d 1012 (1978).
I would hold that lessee's purported exercise of its first refusal right was actually a counteroffer, materially varying from the terms of the offer it was empowered to accept. The Dorland offer was conditioned on the sale of a property known to the lessor. Appellant had an opportunity to inquire as to the Dorland home's sales price and terms before finding that offer "acceptable". In contrast, the lessee's offer was conditioned on the sale of a property unknown to the lessor for an undisclosed price at uncertain terms, indeed not even owned by the lessee. The lessee, or perhaps the principal stockholder, had exclusive and unre*988stricted power to set the sales price and terms. By manipulating these variables, lessee could either insure an immediate sale or as easily scare off all potential purchasers. Thus, with respect to the probability of the satisfaction of the conditions of purchasing the leased property, the Dorlands' and lessee's offers differed materially.
This variation is commercially important because lessees in respondent's position would otherwise be able to significantly hamper their landlords' attempts to sell their own property. Simply by matching outsiders' conditional offers with offers conditioned on events within their control, the landowner could be forced to turn away any number of interested purchasers while lessees would rarely be forced to buy.
In order to purchase the land "in accordance with the terms of" the outside offer, how then would a lessee match an offer conditioned on the sale of a particular piece of property? To answer this question we should ask ourselves what it was that the lessor was willing to accept. In this case appellant was willing to sell for $90,000, and was satisfied that the potential outside buyer with that particular residential property would probably have that sum within 90 days. The tenant then has the right to decide if he wants to pay that same price within 90 days. This way the lessor's ability to alienate his property would not be unreasonably restricted, in furtherance of that strong policy of the law. Seattle-First Nat'l Bank v. Crosby, 42 Wn.2d 234, 254 P.2d 732 (1953). In addition, the cases cited by the majority in its discussion of material variation suggest no different result. In each of those cases a price or financing term offered by the lessee differed materially from the outsider's offer. In this case the chances for the very conclusion of the sale could vary materially with the ultimate control vested in the lessee or the principal stockholder.
Crucial to this determination is the understanding that a right of first refusal is not a right to impede the alienation of land. This lessee bargained only for the right to protect its investment by purchasing at a price acceptable to the *989lessor when the latter chose to sell. Because the condition attached to lessee's promise to pay $90,000 could significantly alter the inevitability of the sale itself, it varies materially from the third party offer. I would therefore rule that its exercise of the first refusal right was ineffective.
Stafford and Utter, JJ., concur with Brachtenbach, C.J.
Reconsideration denied February 9, 1982.

 Indeed, footnote 2 in the majority opinion is grossly misleading. All cases *987cited for the proposition that the right of first refusal arises when the owner forms a specific intent to sell the property are distinguishable. They involve contracts which provide that the first refusal right ripens at that time, as opposed to when an acceptable offer is received. See generally R. Schoshinski, American Law of Landlord and Tenant § 9.9 (1980).