Can Utah courts order specific performance of ambiguous contracts? Regal RealSource v. Enlaw Explained

The Utah Court of Appeals addressed a fundamental question about specific performance and contractual enforceability in Regal RealSource v. Enlaw, clarifying when courts may order specific performance despite contractual ambiguities.

Background and Facts

Enlaw agreed to sell Regal 19.46 acres of undeveloped land for $4,378,500 under a real estate purchase contract (REPC). The parties executed addenda providing that Regal would construct part of a road, with the purchase price reduced by “the cost to complete” the road improvements. The addendum stated the “selection of contractor, the bid amount and the reduction in Purchase Price will be mutually agreed upon by both [parties] prior to the end of the due diligence period.” When Enlaw later refused to sell, claiming the contract was unenforceable, Regal sued for specific performance and recorded a lis pendens.

Key Legal Issues

The court examined whether: (1) the REPC’s price-reduction provisions were too vague to support specific performance; (2) contractual ambiguities render agreements unenforceable as a matter of law; and (3) when closing deadlines are triggered under contract addenda. The district court had granted summary judgment for Enlaw, finding the contract unenforceable due to ambiguous price terms.

Court’s Analysis and Holding

The Court of Appeals reversed, holding that contractual ambiguity does not automatically preclude specific performance. The court clarified that contracts containing “a definite method by which [material terms] can be determined by the court without any new expression by the parties themselves” are enforceable. Here, the REPC provided a clear methodology: Regal would obtain construction bids based on city-approved specifications, and the parties would select one bid, with the bid amount becoming the price reduction. The court distinguished this from unenforceable “agreements to agree” that lack any mechanism for determining essential terms.

Practice Implications

This decision reinforces that Utah courts will examine extrinsic evidence to resolve ambiguities even in specific performance cases. Practitioners should complete discovery before moving for summary judgment on enforceability grounds, as courts may find contracts enforceable despite facial ambiguities. The ruling also confirms that contracts providing objective methodologies for determining price terms—even if requiring future performance—are not per se unenforceable. Additionally, the court’s analysis of lis pendens rights demonstrates their connection to underlying claim validity.