## Facts

- The Regos leased Decker a service-station property for one year with rent consisting of a monthly minimum plus per-gallon charges on gasoline and net profits on diesel sales.
- The lease required the Regos to pave the premises with asphalt by a specified date.
- Decker received (1) an option to renew the lease for four additional years with increased minimum rent in later years and (2) an option to purchase the property for $81,000 by written notice during the lease or renewal term.
- The purchase option provided for credits against the price based on rents paid and required the remaining balance to be paid on terms “identical” to the rent terms; it did not expressly specify a security device for the unpaid balance.
- Decker timely exercised the purchase option, but the Regos refused to convey and sold the property to a third party.
- Decker sued for specific performance of the purchase option and for relief for the Regos’ failure to pave.
- The trial court ordered conveyance to Decker and ordered paving or, alternatively, $15,000 in damages.

## Issues

1. Whether the purchase option was too incomplete or uncertain to be specifically enforced because it did not specify security for the buyer’s long-term installment payments.
2. Whether a decree of specific performance should be conditioned on the buyer providing adequate security to protect the sellers’ interest in the unpaid balance.
3. Whether the trial court’s $15,000 award for failure to pave was improper because it was based on hearsay or an inadequate evidentiary foundation.

## Decision

- The Alaska Supreme Court held the purchase option was sufficiently definite to be enforceable and could be specifically enforced despite the absence of an express security term.
- The court ruled that equity required conditioning specific performance on Decker’s furnishing adequate security for his payment obligations and remanded for the trial court to craft appropriate security provisions.
- The court set aside the $15,000 paving award and remanded for further proceedings because the amount was based on improperly admitted hearsay and lacked competent supporting evidence.

## Legal Principles

- A real-estate option is not unenforceable for uncertainty if the essential terms (subject matter, price, and method of payment) are sufficiently definite; courts may supply reasonable missing terms consistent with the transaction.
- Specific performance is discretionary and may be shaped by equitable conditions to avoid unfairness, including requiring security for deferred purchase-price payments where the decree would otherwise impose substantial risk on the seller.
- Damages must be supported by competent evidence; hearsay cannot serve as the primary basis for fixing a specific monetary award.

## Conclusion

The court enforced the option to purchase but required the conveyance remedy to include adequate security for the unpaid balance, and it remanded the paving-damages issue for redetermination based on proper evidence.


Rego v. Decker, 482 P.2d 834 (Alaska 1971)