Bruggeman v. Jerry's Enterprises, Inc

In Bruggeman v. Jerry's Enterprises, Inc., 591 N.W.2d 705, 706 (Minn. 1999), the Supreme Court of Minnesota considered whether the merger doctrine applied to an agreement that gave the seller the right to repurchase a parcel of real property if the buyer had not started development of the property within two years. When the seller sought to exercise the right to repurchase, the buyer asserted that, because neither the closing documents nor the deeds reserved repurchase rights or referenced the option agreement, the agreement merged into the deed. Id. The seller filed suit seeking an order for specific performance of the buyers obligation under the repurchase agreement. Id. Noting that the presumption of merger can be overcome with evidence to the contrary, i.e., by looking to the intent of the parties, the court held that the doctrine did not apply to an agreement that could not, by its very nature, be performed prior to closing. Id. The court stated: "If the promise is contemplated by the contract to be performed at closing and it is not so performed, then there is some reason to infer that the parties intended that the agreed-upon performance not be required and that the promisee has thereby accepted a substituted performance. On the other hand, if the promise is by its nature not performable until some time after closing, then there is no particular reason to infer that the promisee has agreed to abandon the right to performance, from the mere fact that the undertaking has not been repeated in the deed or other closing papers." Id. at 709.