## Facts

- Westside Investment Corporation granted Humble Oil & Refining Company an exclusive, irrevocable option to purchase a specified tract of Texas land for $35,000.
- Humble paid $50 as consideration for the option; the agreement required $1,750 earnest money upon exercise (total credited $1,800), with the balance due at closing.
- The option could be exercised by notice before 9:00 p.m. on June 4, 1963, with earnest money payable at exercise or within ten days.
- On May 2, 1963, during the option period, Humble sent a letter stating it intended to exercise the option and also proposed adding a term requiring Westside to extend utility lines before closing.
- Westside treated the May 2 letter as a conditional acceptance/counteroffer that rejected and terminated the option.
- On May 14, 1963, Humble deposited the $1,750 earnest money with the named escrow agent and notified Westside that its exercise of the option was not conditioned on the proposed utility term.
- Westside refused to convey the property.
- Humble sued for specific performance; realtor Marvin H. Mann intervened seeking $1,260 in brokerage fees.
- The trial court granted summary judgment for Westside; the court of civil appeals affirmed.

## Issues

1. Whether a counterproposal or conditional communication by the option holder during the option period terminates an option contract supported by consideration.
2. Whether Humble timely and validly exercised the option, entitling it to specific performance.
3. Whether Mann’s brokerage-fee claim could be resolved by summary judgment.

## Decision

- The Texas Supreme Court reversed the judgments for Westside.
- The court held that Humble’s May 2 letter did not reject or terminate the supported option contract.
- The court rendered judgment granting Humble specific performance based on Humble’s timely, unconditional exercise of the option on May 14.
- The court remanded Mann’s brokerage-fee claim because a material fact issue precluded summary judgment on that claim.

## Legal Principles

- An option contract supported by consideration and fixed as to time is binding and irrevocable for the option period.
- A counterproposal or attempted modification concerning terms of the contemplated sale does not, by itself, extinguish the option holder’s power to accept within the option period.
- Mirror-image and rejection-by-counteroffer rules applicable to revocable offers do not automatically terminate a supported option.
- A timely, unqualified acceptance in the manner required by the option validly exercises the option and can support specific performance of a real-estate sale contract.
- Summary judgment is improper when a claim (such as a brokerage commission) turns on disputed material facts.

## Conclusion

Because the option was supported by consideration and remained in force, Humble’s later unconditional, timely acceptance validly exercised the option and entitled Humble to specific performance; the brokerage-commission claim required trial due to unresolved factual disputes.


Humble Oil & Refining Co. v. Westside Invs. Corp., 428 S.W.2d 92 (Tex. 1968)