## Facts

- Coulter & Smith, Ltd. (Coulter) owned undeveloped land in an unincorporated area of Salt Lake County, Utah.
- Roger Russell, Roger Richards, and Kristen Russell (Russell) owned about 3.67 acres located slightly south of Coulter’s property.
- Four unrelated owners held intervening parcels between Coulter’s and Russell’s properties.
- Coulter and Russell separately planned residential subdivision developments, then discussed working together and the possibility of Coulter purchasing Russell’s property (or lots created from it).
- Coulter drafted a letter describing a proposed transaction as an “option” for Coulter to purchase subdivided lots from Russell after development, with pricing and payment terms tied to lot completion and closing.
- The letter stated a price of $26,500 per lot during the first month after completion of the lots, increasing $100 per lot each month thereafter until closing.
- The letter also contemplated development cooperation, referenced a “Work Exchange Agreement,” and included Coulter’s statement that it would “proceed posthaste” to pursue annexation and joint development to aid zoning and related matters.
- At the bottom of the letter, the operative language granted Coulter “an option to purchase lots” and provided: “This option terminates 2 years from the date of completion of the subdivision.”
- In 1991, Russell signed the letter.
- Coulter encountered multiple obstacles in moving the overall development forward and still faced barriers in September 1994.
- Russell threatened to sell to another developer, and Coulter sued seeking specific performance of the alleged option agreement.
- The trial court granted summary judgment for Russell, and Coulter appealed.

## Issues

1. Whether the signed letter created an enforceable option contract for the sale of subdivision lots, or instead was too indefinite and contingent on future events to be specifically enforced.
2. Whether Coulter supplied consideration (or otherwise bound itself) sufficient to make Russell’s “option” promise enforceable.
3. Whether summary judgment for Russell was proper based on the legal effect of the written letter.

## Decision

- The Utah Court of Appeals affirmed the trial court’s grant of summary judgment for Russell.
- The court concluded the letter did not create an enforceable option contract because the contemplated sale depended on future subdivision development and approvals, and key elements (including timing tied to “completion of the subdivision”) were left uncertain.
- The court determined Coulter’s general statements about proceeding quickly with annexation and cooperating on development were not definite, bargained-for obligations that supplied consideration for an enforceable option.
- Because the letter was not an enforceable option contract, Coulter was not entitled to specific performance.

## Legal Principles

- An option contract must be sufficiently definite as to the essential terms of the transaction to be enforceable.
- A writing that leaves material matters for future agreement, or makes the parties’ obligations dependent on undefined future events without workable standards, may be treated as an unenforceable agreement to negotiate rather than a binding contract.
- To make an option enforceable, the option holder must provide consideration or otherwise undertake a definite legal obligation in exchange for the optionor’s promise to keep the offer open.
- Statements of intent or generalized commitments to cooperate, without clear performance duties, may be too indefinite to serve as consideration.
- Interpretation of an unambiguous written agreement is a question of law, and summary judgment is appropriate when the dispute turns on the legal effect of the document rather than contested facts.

## Conclusion

The Utah Court of Appeals affirmed summary judgment for Russell because the letter labeled as an “option” depended on uncertain future subdivision completion and other contingencies, lacked sufficiently definite terms and enforceable mutual obligations, and did not support specific performance.


Coulter & Smith, Ltd. v. Russell, 925 P.2d 1258 (1996)