## Facts

- Ferrero Construction Company sold two residential lots to Dennis Rourke Corporation under a written contract dated April 27, 1981.
- The contract granted Rourke a first right of refusal on the future sale of any of seven remaining lots on Mercy Court in Montgomery County, Maryland, without any stated time limit.
- Rourke did not record the 1981 contract.
- In March 1984, Ferrero notified Rourke of third-party interest in additional Mercy Court lots; Rourke declined as to one lot but sought to exercise the right as to Lot 27.
- Ferrero’s March 12, 1984 letter summarized key terms of an “acceptable contract” for Lot 27 and asked whether Rourke intended to “submit a contract” by March 21 “in order to be considered.”
- Rourke responded that it intended to exercise its right of first refusal and requested the third-party contract so it could match its terms.
- Rourke submitted a contract on March 22, 1984 matching the third-party terms and proposed an April 24, 1984 settlement date.
- Ferrero rejected both the third-party and Rourke submissions, returned them unsigned, and refused to settle.
- Rourke sued for specific performance seeking conveyance of Lot 27.

## Issues

1. Whether the Rule Against Perpetuities applies to a right of first refusal to purchase real property.
2. Whether the particular right of first refusal, lacking any temporal limit, was void under the Rule Against Perpetuities.
3. Whether the March 1984 correspondence and submissions created an enforceable contract for Lot 27 independent of the right of first refusal.

## Decision

- The Court of Appeals of Maryland reversed the intermediate appellate court and left in place the trial court’s denial of specific performance.
- The court held the Rule Against Perpetuities applies to rights of first refusal in real property.
- The court held the Mercy Court right of first refusal was void because it could vest beyond the permissible perpetuities period.
- The court held no independent contract for Lot 27 was formed because Ferrero’s letter solicited an offer and Ferrero never accepted Rourke’s submitted contract.

## Legal Principles

- A right of first refusal to purchase an interest in land is treated as an interest in property for Rule Against Perpetuities purposes when its vesting may be postponed to an uncertain future time.
- A preemptive right with no stated termination date is void if there is any possibility it could vest outside the perpetuities period.
- Corporate parties do not supply a “life in being” to measure the perpetuities period; absent a valid limiting provision, an open-ended preemptive right risks remote vesting.
- Language inviting a party to “submit a contract” “to be considered” is generally an invitation for offers, not an offer capable of acceptance.
- No contract is formed without acceptance; an unsigned, unaccepted submitted contract remains an offer.

## Conclusion

The court ruled that an unlimited right of first refusal in land violates the Rule Against Perpetuities and is void, and it further ruled that the parties’ later communications did not create a separate enforceable agreement because the seller never accepted the buyer’s submitted contract.


Ferrero Constr. Co. v. Dennis Rourke Corp., 311 Md. 560, 536 A.2d 1137 (Md. 1988)