When Is An Option Not An Option?

Despite years of common law case law analyzing the issue of whether an enforceable option has been entered into, even today courts struggle with the issue. Few cases illustrate the difficulties surrounding whether a binding option exists better than Steiner v. Thexton (2010) 48 Cal.4^th 411. Steiner is a recent California Supreme Court case concerning an option to purchase roughly 12 acres of raw land. The case arose in a far different economic climate, and because the seller intended to pursue a deal with better terms with another buyer.

Initially the seller had received two offers to purchase the property. One of the offers was for $250,000 more than Steiner's offer, but required that the seller procure the approval and permits to develop the property. The seller however opted to accept Steiner's offer.