Property
Consideration

Leaseback and repurchase provisions are not consideration sufficient to make an option to purchase a binding option contract.

"The reasoning underlying the rule that there must be separate consideration for an option contract is that an option contract and a contract of sale are two separate contracts: the former is a contract that vests the optionee with the unilateral right to accept the continuing offer during a stated period of time, while the sale contract comes into being only if and when the optionee exercises the option. See, e.g., Foy v. Foy, 484 So. 2d 439, 442-43 (Ala. 1986); Country Club Oil Co. v. Lee, 58 N.W.2d 247, 250 (Minn. 1953); Fru-Con Constr. Corp. v. KFX, Inc., 153 F.3d 1150, 1156, 1158 (10th Cir. 1998) (applying Missouri law); Polk v. BHRGU Avon Props., LLC, 946 So. 2d 1120, 1122 (Fla. Dist. Ct. App. 2006). This recognition that there are two separate contracts and each must be supported by consideration is consistent with the statement from Bratt, 31 Wis. 2d at 451, cited in paragraph 20 above."

We are persuaded that the rule applied in other jurisdictions-requiring consideration for an option contract that is separate from the consideration for the sale-is the proper rule, and we adopt it. It is consistent with Bratt and it flows logically from Bratt's recognition that there are two separate contracts. The plaintiffs do not present a rationale for adopting a contrary rule, and we can see no rationale for doing so."

Affirmed in part, and Reversed in part.

Recommended for publication in the official reports.

2007AP1120 McClellan v. Charly

Dist. IV, Dane County, O'Brien, J., Vergeront, J.

Attorneys: For Appellant: Arntsen, Allen A., Madison; Heffernan, Michael S., Madison; Manzo, Jon C., Middleton; For Respondent: Harrison, Kendall W., Madison; Heinzen, Steven, Madison

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