Earning money is not easy. Most of us are not lucky enough to inherit wealth, so we have to work hard to earn our living. When we receive our hard earned wage, we try to make sure that we use it properly. In buying properties and even service, we try our best to negotiate for the lowest price or the best value for our money. Buying real properties often involves millions of pesos so there is usually a back-and-forth process of making an offer or counter-offer so that the buyer can get it at a lower price while the seller desires to get more monetary value for the property. In some instances, the payment of an earnest money is resorted to in order for the buyer to signify his or her serious intent to buy. There may also be the contract of option and another on first refusal. One case was decided by the Supreme Court that dealt with the issue on whether there is a right of first refusal.
Tuazon Vs Suarez
Suarez leased her real property to Tuazon which was embodied in a lease contract. Sometime later Suarez wrote a letter to Tuazon asking him if he would like to buy the property at a price of more than 37 million. Tuazon is being given a period of two years to signify whether he will buy the property or not. After the expiration of the contract of lease and the expiration of the 2-year period granted to Tuazon to buy the property, Suarez sold the property to her grandsons and executed the needed document for the transfer. Tuazon however, refused to vacate the property and allow the new owners to take possession of the land because he believes that the contract of sale to be invalid. The new owners filed a case of ejectment against Tuazon which was decided by the trial court in favor of the former. While the case is on appeal, Tuazon filed a petition for annulment of the deed of sale on the ground that he has the right of first refusal since the property was first offered to him.
There is No Right of First Refusal
The right of first refusal does not apply here. The letter sent by Suarez to Tuazon was a mere offer which was not accepted since Tuazon was negotiating for a lower price. It is not an option contract or right of first refusal. Suarez has no obligation to sell the property to Tuazon because the offer was not accepted and even if accepted, it is not with a consideration distinct from the value of the land being sold. Said the Court: “Even if the promise was accepted, the private respondent was not bound thereby in the absence of a distinct consideration. In this case, it is undisputed that Roberto did not accept the terms stated in the letter of Lourdes as he negotiated for a much lower price. Roberto’s act of negotiating for a much lower price was a counter-offer and is therefore not an acceptance of the offer of Lourdes.” (G.R. No. 168325, 08 December 2010) The SC went on to say: “An accepted unilateral promise to buy or to sell a determinate thing for a price certain is binding upon the promisor if the promise is supported by a consideration distinct from the price.” Since Suarez did not have the obligation to sell the property to Tuazon, she can sell the property to anyone and therefore the Deed of Sale is valid.
