## Facts

- The plaintiff optionee held an option contract granted by the defendant optionor covering certain real property.
- The option allowed the optionee to purchase the property if the optionee gave written notice of exercise to the optionor **by registered mail** on or before **August 21, 1977**.
- The optionee prepared written notice stating his election to exercise the option.
- On **August 20, 1977**, within the option period, the optionee **mailed** the notice by registered mail, properly addressed and with sufficient postage.
- The notice was **never received** by the optionor.
- Treating the option as expired, the optionor refused to convey the property.
- The optionee sued seeking **specific performance** or, in the alternative, **damages** for breach.
- The trial court granted **summary judgment** for the optionor on the ground that the option had not been effectively exercised because notice was not received.
- The optionee appealed.

## Issues

1. Where an option contract requires notice of exercise “by registered mail” on or before a fixed date, is the option effectively exercised upon timely and proper mailing even if the optionor does not receive the notice within the option period?

## Decision

- The Oklahoma Court of Civil Appeals **reversed** the summary judgment for the optionor and **remanded**.
- The court held the option was **effectively exercised upon timely, proper mailing** of the notice by registered mail.
- Because the contract did not clearly require **receipt** of the notice by the deadline, the optionor could not defeat exercise of the option based solely on non-receipt.

## Legal Principles

- The construction of an **unambiguous contract** is a question of **law** for the court; when material facts are undisputed, the dispute may be resolved on summary judgment, but only under the correct legal rule.
- In construing a contract, the court’s aim is to determine the parties’ **intent** from the contract’s language, purpose, and circumstances, and to give effect to that intent if lawful.
- Parties can specify the conditions for exercising an option, including whether notice must be **received** by a certain date; if they want receipt as a condition, they can say so.
- When a contract permits acceptance by mail (or calls for notice by mail), the **mailbox/dispatch rule** generally provides that acceptance is effective when properly addressed and posted with sufficient postage, unless the contract clearly provides otherwise.
- An option contract may be treated as a continuing offer such that, when the option’s notice provision contemplates mailing and does not clearly demand receipt, the dispatch rule can apply to make exercise effective on mailing.
- Where timely, proper mailing is the contractually specified method of notice and receipt is not expressly required, the risk of postal delay or non-delivery is placed on the party who agreed to that method of communication, rather than on the sender who complied with the contract.

## Conclusion

In *Worms v. Burgess*, the court held that an optionee who timely mailed a written notice of exercise by the contract’s required method (registered mail) validly exercised the option even though the optionor never received the notice, and it reversed the trial court’s summary judgment for the optionor and remanded for further proceedings.


Worms v. Burgess, 620 P.2d 455 (1980)