Legal Memorandum: Issue of Fact Raised in Pleadings

Issue: Under the laws of the state of Minnesota, do pleadings raise an issue of fact where the parties dispute whether an agreement constituted an option, "right of first refusal," or mere offer?

A court in ruling on a defendants’ motion for judgment on the pleadings must give all benefit of the doubt to plaintiffs.  Stephenson v. Plastics Corp. of Am., 276 Minn. 400, 150 N.W.2d 668, 671 (1967).  The motion may be granted only if the pleadings create no issues of fact.  15 Minn. Prac. § 12.1 at 184 (1995). 

Whether a contract is an "option" or a "right of refusal" or a "mere offer" is a matter of interpretation.  3 Eric Mills Holmes, Corbin on Contracts § 11.3 at 481, § 11.4 at 488 (rev. ed. 1996) [hereafter Corbin].  In fact, Corbin states that "in no case are the legal relations [of buyer and seller] determinable from the name alone."  Id. at 481; see also Johnson v. Fitzke, 234 Minn. 216, 48 N.W.2d 37, 39 (1951) (name of contract is not controlling).  Interpretation requires knowledge of the entire context, including not only the words used but the facts underlying their use.  Corbin, supra, § 11.3.  Careful investigation into the alleged facts is particularly important because of the inconsistencies in the use of terms among sellers, buyers, lawyers and real estate professionals in this area of law.  Id. § 11.4 at 487.  Again, Corbin stresses this fact:  "[t]he character of a transaction or the legal relations that it creates can never be determined by the name that anyone has given it."  Id.  Therefore, the extrinsic circumstances and communications raised by the Complaint are important to […]