Real estate developer Martin Steiner approached Paul Thexton, as trustee for the FAS Family Trust (Thexton), to express interest in buying several residences on a 10-acre portion of Thexton’s 12-acre parcel. Steiner and Thexton agreed, in a contract prepared by Steiner, that Thexton would sell the 10-acre portion to Steiner for a $500,000 by September 2006, if Steiner decided to buy the property after pursuing, at his own expense, county approvals and permits for splitting the parcel. The agreement also stated that Steiner was not obliged to do anything and could abandon the effort with notice to Thexton and delivery of any work performed up to that time.
In particular, the parties’ agreement was labeled as a “real estate purchase contract,” in which the buyer offered to purchase the seller the specified amount for 10 acres of the 12-acre property. The buyer, in turn, had from the date of acceptance until the closing of escrow to satisfy or waive certain contingencies. Among the contingencies, it was stated that the parties expressly understood that the buyer, at its absolute and sole discretion, could elect not to continue with the deal, and the purchase contract would be come null and void.
