## Facts

- William Jonathan Abbitt executed a written land option agreement granting Union Oil Company of California the right to purchase a described tract in Newport News, Virginia.
- The option period was 120 days, but it would not begin until the City of Newport News acquired the necessary highway rights-of-way and began construction of two proposed intersecting highways near the property.
- Abbitt died, and United Virginia Bank/Citizens & Marine, as executor and trustee under his will, succeeded to his interest in the property.
- Union Oil assigned the option to Sanford & Charles, Inc., which asserted the option’s enforceability.
- The Bank filed a declaratory judgment action seeking a declaration that the option was void under the common-law rule against perpetuities because the triggering contingency might occur beyond 21 years (or not at all).
- The trial court upheld the option as valid and enforceable, and the Bank appealed.

## Issues

1. Whether the common-law rule against perpetuities applies to commercial land option contracts.
2. Whether an option conditioned on an event that may occur beyond 21 years from creation (and not tied to any life in being) is void from inception.
3. Whether the court may preserve the option by reformation (cy pres) or by applying a wait-and-see approach based on later events.

## Decision

- The Supreme Court of Virginia reversed the judgment and held the option void.
- The court held that the rule against perpetuities applies to option contracts.
- Because the option was not measured by any life in being, the determinative period was a gross term of 21 years from the option’s creation.
- The option violated the rule because, at the time of contracting, there was a possibility that the condition precedent (city right-of-way acquisition and commencement of construction) would occur beyond 21 years, postponing exercisability past the perpetuities period.
- The court rejected reformation/cy pres and rejected wait-and-see; validity must be determined at the time the interest is created, not by subsequent developments.
- Because the agreement was void ab initio, damages for nonperformance were unavailable, as damages would effectively compel performance of an invalid restraint on alienation.

## Legal Principles

- The common-law rule against perpetuities applies to option contracts affecting land.
- Where an interest is not tied to any measuring life, the perpetuities period is 21 years from creation.
- An interest is invalid if, at creation, there exists any possibility that vesting or exercisability may occur beyond the perpetuities period; probability or expected timing is irrelevant.
- Courts may not rewrite a private option agreement to insert a limiting term to avoid the rule against perpetuities absent legal authority to do so.
- Virginia applies the traditional rule and does not apply wait-and-see to validate an interest that was possibly too remote at creation.
- An interest violating the rule is void ab initio, and expectation damages are not recoverable for failure to perform such a contract.

## Conclusion

The Virginia Supreme Court held that a land-purchase option whose exercise could be postponed beyond 21 years by an uncertain governmental contingency violates the rule against perpetuities, is void from the outset, cannot be saved by reformation or wait-and-see, and cannot support an award of damages.


United Va. Bank/Citizens & Marine v. Union Oil Co. of Cal., 214 Va. 48, 197 S.E.2d 174 (1973)