California, United States of America
The following excerpt is from Gupta v. Bascom Hotel, LLC, H040818 (Cal. App. 2016):
The Guptas contend that we must construe the agreement as they wish because they would otherwise forfeit what they paid in option consideration. " 'If the agreement can be reasonably interpreted so as to avoid the forfeiture, it is our duty to do so.' " (McNeece v. Wood (1928) 204 Cal. 280, 284.) Here, the agreement cannot be reasonably interpreted so as to avoid a forfeiture. The agreement expressly and unambiguously stated that the option consideration was "[n]on-refundable"that is, forfeitedif the Guptas failed to satisfy the agreement's preconditions for exercise of the option. No amount of contract construction can eliminate this express forfeiture provision to which the Guptas explicitly agreed. And, as we have already concluded, the agreement cannot be reasonably construed to permit the option consideration to be paid by a secured note.
The above passage should not be considered legal advice. Reliable answers to complex legal questions require comprehensive research memos. To learn more visit www.alexi.com.