## Facts

- Developers planned a regional shopping center at Tysons Corner in Fairfax County, Virginia, but needed rezoning approval amid significant opposition and competition.
- City Stores Co. (owner of Lansburgh’s) was interested in becoming a major tenant but was reluctant to publicly support the developers’ rezoning effort without assurance of tenancy.
- At the developers’ request, Lansburgh’s president provided a letter for use in the rezoning hearing stating Lansburgh’s strong interest in the project and preference for the developers’ site over a competing tract.
- In exchange, the developers delivered an undated letter promising Lansburgh’s the opportunity to become a major tenant if zoning was obtained, with “rental and terms at least equal to that of any other major department store in the center.”
- The developers obtained rezoning and began leasing major-tenant spaces, but refused to lease to City Stores and pursued another department store for the remaining anchor space.
- City Stores sued for specific performance of the alleged option to lease; the district court found a binding, sufficiently definite option-lease agreement and ordered specific performance.

## Issues

1. Whether the developers’ letter, exchanged for Lansburgh’s zoning-support letter and related conduct, created a binding option contract to lease a major-tenant space.
2. Whether the option-lease was sufficiently definite to be specifically enforced despite open terms and the fact that the building was not yet constructed.
3. Whether specific performance was an appropriate remedy given the asserted adequacy of money damages and asserted equitable defenses (including laches and unclean hands).

## Decision

- The D.C. Circuit affirmed the decree ordering specific performance.
- The court agreed that the parties formed a binding option supported by consideration: City Stores’ zoning-support letter provided a concrete benefit to the developers in a contested rezoning process.
- The court held the agreement sufficiently definite for enforcement because material terms were objectively ascertainable by reference to the leases offered to other major department-store tenants (“at least equal to” standard).
- The court held money damages were inadequate because the opportunity to secure an anchor location in a new regional shopping center involved benefits difficult to quantify.
- The court rejected asserted equitable defenses and found no basis to deny specific performance on hardship or misconduct grounds.

## Legal Principles

- An option contract may be created by business correspondence when the promisor seeks and receives performance that constitutes consideration, and the surrounding circumstances show intent to be bound.
- A contract may be specifically enforced even if some terms remain to be negotiated, so long as the material terms are sufficiently definite or can be fixed by an objective standard.
- Comparative-term provisions (e.g., terms “at least equal to” those given to similarly situated parties) can supply enforceable standards for rent and other material lease terms.
- Specific performance may be granted for commercial lease rights when the promised location and status are unique and damages cannot adequately measure the loss.
- Equitable defenses such as laches, unclean hands, and hardship will not bar specific performance absent a supported factual showing.

## Conclusion

The court enforced an option to lease a major-tenant space in a planned shopping center, holding that the tenant’s zoning-support letter supplied consideration and that the agreement’s comparative-terms formula made it definite enough for specific performance, with damages inadequate and no equitable bar to relief.


City Stores Co. v. Ammerman, 394 F.2d 950 (D.C. Cir. 1968)