HOWARD-ARNOLD, INC. v. T.N.T. REALTY, INC., SC 19227
Judicial District of New Haven
Contracts; Real Property; Whether Plaintiff Excused from Exercising Option to Purchase in Precise Accordance with its Terms due to Defendant’s Failure to Fulfill Contractual Obligation to Perform Environmental Remediation of the Property. The plaintiff brought this action seeking, among other things, specific performance of an option to purchase commercial real estate from the defendant. The option to purchase was contained in the parties’ lease agreement. The trial court declined to order specific performance, finding that the plaintiff had not properly exercised the option in accordance with its terms because it had not tendered payment of the purchase price. The court rejected the plaintiff’s argument that it was excused from the option’s tender requirement because it was unable to obtain financing for the purchase of the property due to the defendant's failure to fulfill its contractual obligation to perform environmental remediation of the property. The plaintiff appealed and the Appellate Court (145 Conn. App. 696) upheld the order declining to award specific performance, holding that an option to purchase must be exercised in exact accordance with its terms and that the option here plainly required the plaintiff to tender the purchase price. The Appellate Court rejected the plaintiff’s claim that the defendant’s failure to remediate and repair the property excused the tender requirement, noting that the cases the plaintiff cited in support of that proposition concerned specific performance of contracts for the sale of land rather than specific performance of option contracts. Finally, the court found no authority for the plaintiff’s argument that it was excused from exercising the option in precise accordance with its terms because it was “ready, willing and able” to purchase the property, finding that the plaintiff was again confusing the legal principles applicable to an option to purchase with those applicable to a contract for sale. The Supreme Court will decide whether the Appellate Court properly concluded that the plaintiff did not correctly exercise the option to purchase real estate when, at the time of such exercise, the defendant had not performed its obligations to the plaintiff with respect to the environmental remediation of the real estate.