When Gordon told Hanson that he was considering selling his house, Hanson offere

Question

When Gordon told Hanson that he was considering selling his house, Hanson offered to buy it. Gordon and Hanson entered into a contract in which Hanson paid Gordon $1,000 in cash for the right to buy Gordon's house for $150,000 in the event Gordon decided to sell it. Two weeks later, Jones offered Gordon $200,000 for his house, and Gordon agreed to sell it to her for that amount. Hanson sued Gordon to force Gordon to sell the house to him for $150,000, rather than to Jones for $200,000. Identify the probable result of the action. What type of contract, if any, was entered into between Gordon and Hanson?

Explanation / Answer

Judgment would be for Hanson. Gordon and Hanson entered into a first-refusal contract providing that if Gordon decided to sell his house to anyone, Hanson would have an option to buy it for $150,000. Hanson's right to buy the house arose at the time Gordon decided to sell his house to Jones. Gordon breached his contract with Hanson by not offering to sell Hanson the house and instead entering into an agreement with Jones.

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