Ralph C. Sgambelluri, Appellant, v. Pilar Calvo Velarde et al., Appellees, 511 F.2d 61 (9th Cir. 1975)

The would-be buyer of land in Guam appeals a judgment denying specific performance of his alleged contract. The district court held that he had failed properly to exercise his option.

The option provided that it could be exercised by the mailing of notice by registered mail to a given address. The buyer complied. The district court held, however, that the buyer's subsequent recourse to an escrow rendered the exercise of the option ineffective. This was error. The option was exercised when the required notices were delivered to the stated address.

The exercise of the option to purchase the land substituted a bilateral contract of purchase and sale for the previous unilateral option contract. Charles Young Construction Co. v. Look, 508 F.2d 275 (9th Cir., 1973).

The terms of that bilateral contract were contained in the option agreement. It is a question of local law whether the buyer's tendered performance substantially complied with his obligations under the contract. If his performance complied, he was entitled to have the contract enforced. The district court should decide that question free from any misconceptions about the validity of the exercise of the option.

The judgment is vacated, and the cause is remanded. Neither party shall recover costs.