Every Bundle includes the complete text from each of the titles below:
PLUS: Hundreds of law school topic-related videos from
The Understanding Law Video Lecture Series™:
Choose Your Subscription:
--OR--
Register and Subscribe Now
Every Bundle includes the complete text from each of the titles below:
PLUS: Hundreds of law school topic-related videos from
The Understanding Law Video Lecture Series™:
Choose Your Subscription:
--OR--
United Virginia Bank/Citizens & Marine sued Union Oil Company of California claiming that the agreement violated the rule against perpetuities because it was not guaranteed that the city would acquire the right to the highways.
If parties intend for an interest to vest within 21 years, but it is unlikely that the interest will vest within 21 years, the interest violates the rule against perpetuities.
Abbitt and Union Oil Company of California (Union) entered an agreement where there was an option to purchase land in Newport News. The option was open for 120 days, but the option would not start until the city gained rights to the new highways. Union assigned the agreement to Sanford & Charles, Inc. (Sanford). United Virginia Bank/Citizens & Marine (Bank) was the executor of Abbitt’s estate. The bank sued claiming that the agreement violated the rule against perpetuities because it was not guaranteed that the city would acquire the right to the highways. Sanford asked the court to apply the wait-and-see doctrine so that if the contingent event occurs within 21 years, the rule against perpetuities would not apply, and the agreement would be valid. The trial court upheld the agreement and the Bank appealed.
If parties intend for an interest to vest within 21 years, but it is unlikely that the interest will vest within 21 years, does the interest violate the rule against perpetuities?
Yes. The judgment of the trial court is reversed. Virginia law does not permit the wait-and-see doctrine when making a determination regarding whether or not the rule against perpetuities applies.
If parties intend for an interest to vest within 21 years, but it is unlikely that the interest will vest within 21 years, the interest violates the rule against perpetuities. In situations where a corporation is the party receiving the option, the 21-year period begins when the agreement is executed.