PROPERTY LAW
Supreme Court of Alaska (2024)
Scott Tompetrini
In Joy v. Hahn, 555 P.3d 3 (Alaska 2024), the supreme court held that a purchase option is enforceable when it contains all the essential terms of an agreement to buy real property. (Id. at 8). Joy leased his property to a commercial tenant, Hahn. (Id. at 5). The agreement included a clause that gave the occupant the option to purchase the property at a discounted price after three years. (Id.). Hahn signed the contract, listing his business as the occupant of the property, and after three years, notified Joy that he intended to purchase the property per the agreement. (Id. at 5–6). When Joy refused to sell, Hahn filed a complaint seeking a declaratory judgment that the purchase option was valid. (Id. at 6). The lower court granted Hahn’s motion for summary judgment and later ordered specific performance of the agreement. (Id.). On appeal, Joy argued that the agreement was not enforceable because it was ambiguous as to whether the purchase required further negotiation on certain terms. (Id. at 7–8). Joy also argued that Hahn had waived his right to purchase when he rejected a separate purchase offer. (Id. at 11). The supreme court found the agreement was enforceable because it included the central terms of the purchase like total price, down payment amount, interest rate, and the identity of the party. (Id. at 8). Though some terms required the use of gap-fillers by the lower court, the supreme court found that those terms were not essential to the agreement. (Id. at 9). Moreover, since Joy’s separate offer to Hahn contained markedly different terms, the court found that Hahn had not waived his right to purchase by declining that offer. (Id. at 11). Thus, the supreme court affirmed the lower court, holding that the purchase option of the agreement was enforceable, and ordering specific performance of the agreement. (Id. at 13).
