Case of the Month – Tiffany Builders, LLC, et al. v. Delrahim et al.

In a recent ruling by the Court of Appeal, a case involving a handwritten agreement between two parties has led to a dispute over whether there was a contract to assign an escrow on a Twelve Million Dollar real estate deal. The Appellate Court found that the agreement, though lacking in detail and subject to future negotiation on the actual deal price, was indeed a valid and enforceable contract.

The genesis of this legal saga took place over coffee at the Coffee Bean in Calabasas. The individuals involved, armed with a notebook and borrowed pen, hashed out a deal resulting in a two-page handwritten agreement. The essence of the agreement was a strategic move: one party would step back from a multimillion-dollar deal by assigning their rights in the underlying contract and escrow, with the other party stepping in to renegotiate the terms, providing compensation for the assignment, and completing the transaction with the seller.

The legal intricacies arise from the cryptic language used in the handwritten agreement, particularly the representation of the future amount as “X.” In the opinion, the court emphasized that when supplemented by parol evidence—explanations of the parties involved—the agreement was sufficiently definite to be legally binding.

The court asserted that the use of “X” as a placeholder was acceptable, as it symbolized the final contract price determined by future events. The court found that the parties had provided a practical and objective method for determining the value of “X,” rendering the contract enforceable.

Litigation had initially ensued when the original buyer proceeded with the transaction without honoring the assignment agreement. The assignee sued under the handwritten agreement, alleging breach of contract, specific performance, unfair practices, and tortious interference. The trial court initially granted summary judgment in favor of the original buyer, finding the handwritten agreement inadequate to form a contract. The Appellate Court found otherwise, emphasizing that courts should strive to uphold agreements between parties, even when faced with some degree of indefiniteness. Instead, the Appellate Court stressed that the law leans against destroying contracts due to uncertainty and that agreements should be construed to carry out the reasonable intentions of the parties.

In conclusion, this case serves as a reminder that the enforceability of a contract may hinge on the circumstances surrounding its formation, and even unconventional agreements, when supplemented by clear explanations, can find legal standing. The decision reflects the court’s commitment to upholding agreements and reaching just results, even in the face of unique and cryptic contractual arrangements.