## Facts

- A residential lot purchaser bought an undeveloped subdivision lot for $65,000 under an earnest-money contract contemplating an option at closing.
- At closing, the developer conveyed the lot by deed and the parties executed a written, signed option agreement.
- The option gave the developer the right to repurchase the lot at 90% of the original sale price if the purchaser failed to commence construction of a private residence within 18 months.
- The option agreement recited nominal consideration of $10, but the $10 was not actually paid.
- The purchaser did not commence construction within 18 months.
- The developer attempted to exercise the option; the purchaser sued for a declaration that the option was unenforceable for lack of consideration, and the developer sought specific performance.

## Issues

1. Whether a written, signed real-property option that recites nominal consideration is enforceable when the nominal consideration was not actually paid.
2. Whether Texas law should adopt Restatement (Second) of Contracts § 87(1)(a) for option contracts, making a purported recital of consideration sufficient if the exchange is fair and acceptance is within a reasonable time.

## Decision

- The Texas Supreme Court reversed the court of appeals and remanded.
- The Court held that nonpayment of the recited nominal consideration did not bar enforcement of the written option agreement.
- The Court adopted Restatement (Second) of Contracts § 87(1)(a) as Texas common law in this setting.
- A concurrence agreed with the result but questioned requiring fictional consideration recitals for commercial options.

## Legal Principles

- Under Restatement (Second) of Contracts § 87(1)(a), an offer is binding as an option contract if it is (1) in writing and signed by the offeror, (2) recites purported consideration, and (3) proposes an exchange on fair terms within a reasonable time.
- In a commercial option contract, a false or unpaid recital of nominal consideration can satisfy the option’s irrevocability requirement when the § 87(1)(a) elements are met.
- Traditional “independent consideration” language does not require invalidating a signed written option solely because the nominal option fee was not paid, where the transaction evidences an intended binding commercial commitment.
- Enforceability under § 87(1)(a) does not eliminate other fact questions on remand, including proper exercise of the option and appropriate relief.

## Conclusion

The court enforced a signed, written real-property option despite nonpayment of the recited $10, adopting Restatement § 87(1)(a) and treating a purported nominal-consideration recital as sufficient when the option reflects a fair exchange within a reasonable time.


1464-Eight, Ltd. v. Joppich, 154 S.W.3d 101 (Tex. 2004)