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the lessee a right to purchase the leased property under certain
conditions and within a certain time limitation. The lease
contract also contained a purchase refusal clause, which gave the
lessor the right to notify the lessee of a third-party offer to
purchase the property. The lessee then had a certain time period
in which to purchase the property on the same terms offered by
the third party. If the lessee failed to purchase, the lessor
then had a right to sell the property to the third party, subject
to the leasehold interest of the lessee. During the term of the
lease (which had been properly extended under the terms of the
contract), the lessee mailed a proper notification form stating
that it exercised its purchase option. Four days later, the
lessor notified the lessee of a bona fide purchase offer from a
third party, which was $5,500 higher than the purchase option
price. The issue before the court was whether the delivery of
the lessee’s notice formed a vendor/purchaser relationship
between the parties and thus nullified the provisions of the
purchase refusal clause. The Supreme Court of Texas held that,
under the terms of that particular lease contract, the act of the
lessee’s giving proper and valid notice to the lessor did create
a valid and enforceable contract for a sale between the lessor
and the lessee, and, thus, the lessee, upon tender of the
purchase price, was entitled to specific performance under the
terms of the purchase option clause.
In the instant case, petitioners and the Hewitts entered
into a contract for the sale of the Foxbriar property, with an
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