## Facts

- Brian G. Hutton and Albert S. Ruddy (Buyers) contracted to purchase an apartment building at 426–428 Spaulding Drive in Beverly Hills, California, from Mike and Sheina Gliksberg (Sellers) for \$750,000.
- The agreed financing structure was \$250,000 cash into escrow, a \$400,000 new first trust deed loan obtained by Buyers, and a \$100,000 second trust deed loan to be carried by Sellers.
- The parties executed escrow instructions calling for escrow to close on or before April 21, 1977, with time being of the essence.
- The contract/escrow documents included a “net to seller” provision requiring Sellers to receive no less than \$700,000 “regardless of adjustments such as prepayments mortgage penalties, real estate commissions, etc.,” with further escrow instructions to come from Sellers.
- A broker explained that “adjustments” referred to charges through escrow, and agreed to reduce his commission if needed so Sellers would net \$700,000 exclusive of encumbrances.
- By April 21, Buyers had performed their escrow obligations and were ready to close, but Sellers had not delivered necessary documents to escrow.
- On April 22, Sellers canceled escrow in writing and refused to complete the sale.
- Buyers sued for specific performance of the purchase agreement.
- The trial court entered judgment for Buyers, ordered Sellers to convey the property, and awarded incidental monetary compensation. The compensation reflected, among other things, increased financing costs associated with higher interest rates (from about 9.25% at the time performance was due to higher rates by the time of judgment).
- Sellers appealed, challenging enforceability (uncertainty), tender, and the monetary award.

## Issues

1. Were the contract’s price and financing terms—especially the “net to seller” clause referencing “adjustments” and “etc.”—too uncertain to support specific performance?
2. Did Buyers fail to make an adequate tender of performance so as to bar specific performance?
3. May a court granting specific performance also award incidental monetary compensation (including amounts linked to increased interest costs) as part of the equitable relief?

## Decision

- The Court of Appeal affirmed the judgment.
- The contract and escrow instructions were sufficiently definite to be specifically enforced; the “net to seller” language did not make the agreement unenforceable.
- Buyers’ performance and readiness to close, combined with Sellers’ failure to provide required documents and their written cancellation of escrow, supported the finding that Buyers were entitled to specific performance despite Sellers’ tender arguments.
- The trial court did not err by awarding incidental compensation in addition to ordering conveyance; the monetary award was treated as equitable relief incident to specific performance rather than legal damages for breach.

## Legal Principles

- Specific performance may be denied when a contract is so uncertain that the court cannot determine what must be performed, but “net to seller” provisions are not automatically too indefinite where the writings and proof show a workable method to reach the stated net amount.
- A court may consider escrow instructions and related proof explaining how charges and credits will be handled in escrow when determining whether a real estate contract is certain enough for specific performance.
- A buyer seeking specific performance must show readiness, willingness, and ability to perform; where the seller prevents closing (for example, by failing to supply required documents and canceling escrow), rigid, technical tender rules will not defeat equitable relief.
- When specific performance is granted, California courts may also award monetary compensation incident to the decree to place the plaintiff as nearly as possible in the position the plaintiff would have occupied had timely performance occurred.
- Such incidental compensation is equitable in character; it is tied to enforcement of the contract as performed, not to an award of legal damages based on disaffirming the contract.

## Conclusion

Hutton v. Gliksberg holds that a real estate purchase contract with a “net to seller” clause can be sufficiently definite for specific performance when escrow documents and evidence show how the net figure will be achieved; that buyers who are ready and have performed their escrow obligations are not barred by alleged tender defects when sellers block closing and cancel escrow; and that a court ordering specific performance may also award equitable incidental compensation, including amounts linked to increased financing costs caused by the seller’s delay.


Hutton v. Gliksberg, 128 Cal. App. 3d 240 (1982)