The closing months of 1974 found Continental Cablevision of New England, Inc. and United Cable Company of New Hampshire, Inc. engaged in wide-ranging and expensive litigation involving television franchise rights in Manchester, New Hampshire. The parties, while the litigation was still going on, decided to settle. Continental agreed to terminate the litigation which it had instituted and to concede certain disputed franchise areas to United Cable, in return for $135,000 and a right of first refusal in the event of any attempted direct or indirect transfer of various property assets or the controlling stock interest in United Cable to a third party.

United Cable was a wholly-owned subsidiary of Friendly Broadcasting Company, Inc., which in turn was a wholly-owned subsidiary of United Broadcasting Company, Inc., whose sole stockholder was Richard Eaton. In January of 1975, Continental, United Cable, and Eaton (acting as agent for both United Broadcasting and Friendly, as well as United Cable, and in his own right) entered into a written agreement, embodying the terms of settlement.1 The contract ultimately entered provided as to the right of first refusal, in pertinent part:2

United hereby grants to Continental a right of first refusal to acquire all or any part of the assets, real or personal, tangible or intangible, including but not limited to all CATV system facilities, house drops and associated equipment of United constituting all or any portion of United's CATV system or systems serving any or all portions of the City of Manchester, New Hampshire (the "System Assets"), and Eaton for himself and as authorized agent for United Broadcasting and Friendly hereby grants to Continental a right of frist (sic) refusal to acquire the shares of stock of United constituting its controlling capital stock interest (the "Control Stock") in each instance before the System Assets or any shares of the Control Stock may, directly or indirectly, be sold or transferred to any third person or persons.3

Continental subsequently complied with the provisions of the agreement and received payment of $135,000, representing part of the consideration to which it was entitled.4 The document in final form on January 15, 1975 or January 16, 1975 was sent by Continental from Massachusetts, where it had prepared it, to Eaton in Maryland. It, though dated "as of this 22nd day of January, 1975" (the contemplated settlement date), was still unsigned by either party when sent by Continental to Eaton. On January 17, 1975, Eaton, in Maryland, signed on behalf of himself, United Cable, Friendly Broadcasting, and United Broadcasting, and returned the Settlement Agreement to Continental in Massachusetts, where Continental, upon approval by the board of directors, signed the document on January 20, 1975.

A second, conformed copy of the Settlement Agreement, the text of which was in all respects identical with that which had been signed by the parties on January 17, 1975 in Eaton's case and January 20, 1975 in Continental's, was sent to Eaton or his counsel by Continental bearing its signature on January 20, 1975. On receipt thereafter of the conformed copy bearing only Continental's signature, Eaton, who was in Maryland, also signed the document. The date appearing on both the agreement signed January 17, 1975 by Eaton and January 20, 1975 by Continental, and the conformed copy, was "as of" January 22, 1975.

In 1981, Eaton died. The trustees of Eaton's estate now seek to sell a controlling stock interest in United Broadcasting to a third party.5 Continental, arguing that such a move constitutes an indirect transfer of the controlling stock interest of United Cable, brought the present action in the United States District Court for the District of Maryland to enforce its preemptive rights. The district court granted summary judgment to the defendants, finding the right of first refusal in United Cable stock violated the Maryland Rule Against Perpetuities. Continental has appealed.

As a preliminary matter, it has to be resolved, factually, whether a sale of the type contemplated by Eaton's trustees has even vested in possession any right of first refusal which may exist in Continental. Without finding it necessary to decide whether the settlement agreement truly extended to a transfer of a controlling interest in United Broadcasting, the district judge, in a footnote, indicated that he was of the opinion that it would be "illogical" not to consider a transfer of the parent as an indirect transfer of the wholly-owned subsidiary's controlling capital stock interest. We consider the matter as pertinent to our disposition of the case and, hence, one requiring decision. Upon examination of the record, we are convinced that the district court's statement on the matter, while an aside, was a reasoned one, reaching the correct result on the preliminary point involved.6 The objects which the Settlement Agreement sought to accomplish were as much affected by stock in United Broadcasting which owned, through Friendly Broadcasting, 100% of United Cable, as by stock in United Cable itself.7 We cannot agree, however, with the ultimate result the district court reached.

Construing the Settlement Agreement requires, as an initial inquiry, the determination of which forum's law is applicable. It is well accepted law that a federal court sitting in diversity is required to follow the choice of law rules of the state in which it sits, i.e., in the present case, in Maryland. Klaxon Co. v. Stentor Elec. Mfg. Co., 313 U.S. 487, 61 S.Ct. 1020, 85 L.Ed. 1477 (1941). The district judge correctly applied Maryland law at the choice of law rules stage and found that, under Maryland law, the place of contracting or locus contractus established what substantive law should apply. Traylor v. Grafton, 273 Md. 649, 657, 332 A.2d 651, 659 (1975); Maryland Casualty Co. v. Armco, Inc., 643 F.Supp. 430, 431 (D.Md.1986), aff'd, 822 F.2d 1348 (4th Cir.1987), cert. denied, --- U.S. ----, 108 S.Ct. 703, 98 L.Ed.2d 654 (1988). Specifically, Maryland has defined the locus contractus as the place "where the last act is performed which makes an agreement a binding contract." Grain Dealers Mutual Ins. Co. v. VanBuskirk, 241 Md. 58, 65-66, 215 A.2d 467, 471 (1965).

The district court examined the contracting process engaged in by the parties. Having initially sketched out in broad outline the terms of the Settlement Agreement, the parties, negotiating through counsel, proceeded to prepare a document delineating with detail the contours of the right of first refusal. The agreement as so prepared was discussed by the parties who decided that it was accurate and agreeable to both of them in all respects, save for the lack of certain provisions regarding the coverage of direct or indirect actions of Friendly Cablevision and United Broadcasting.8

Continental's counsel drafted the final version of the Settlement Agreement in Massachusetts, modifying the language to conform to a mutually satisfactory solution for the one item as to which agreement was lacking. Continental sent the new Settlement Agreement, brought to what proved to be final shape in Massachusetts, to Eaton for signature. Continental had not then signed the document. On receiving the unsigned document in Maryland, Eaton signed and either himself forwarded it or had an agent forward it to Continental in Massachusetts. A special meeting of Continental's Board of Directors was convened, at which time the Board voted to enter into the Settlement Agreement and the document was signed on Continental's behalf.

Thereupon, Continental, in order to have available a conformed copy which would put an executed version in the hands of both parties, signed a second version and mailed it to Eaton, again in Maryland, who then attached his signature.

The district judge ruled that, as to the state whose substantive law should apply, Maryland was the proper state to select, concluding that Maryland was the locus contractus. He reasoned that, although signature by all the contracting parties is the most uniformly regarded satisfactory way to elevate a piece of writing into an agreement, it is not the only way. A settlement agreement, like any other contract, comes into being as soon as an offer and an acceptance, with due consideration, have occurred, regardless of whether subsequent formalities ensue. Baker v. Dawson, 216 Md. 478, 484-85, 141 A.2d 157, 160-61 (1958). Parties could agree upon the terms of a contract to be entered by them and, when a paper writing in exactly satisfactory terms has been finalized, it would become a contract if the parties so intended, even though the signatures of one of the parties, or indeed of all of them, were lacking.

The district judge's major principle of law, namely, that, in certain circumstances, signatures are not required to bring a contract into being, was entirely correct. See, e.g., Porter v. General Boiler Casing Co., Inc., 284 Md. 402, 410-11, 396 A.2d 1090, 1095 (1979). His minor premise as to how that principle should be applied in the instant case was, however, slightly flawed.

Maryland courts look at the circumstances surrounding contract formation in order to determine whether the parties had entered into a binding oral or informal contract, or intended to enter into a written agreement that would become binding only upon full signature. Eastover Stores, Inc. v. Minnix, 219 Md. 658, 665, 150 A.2d 884, 888 (1959); Peoples Drug Stores, Inc. v. Fenton Realty Corp., 191 Md. 489, 493-94, 62 A.2d 273, 275 (1948). In the present case, there is no evidence that the parties intended to be bound by the unsigned contract; on the other hand, there is adequate indicia they intended the final signed document to be the binding agreement. If both parties only intend to be bound by a signed written instrument, their agreement is not valid, existing and enforceable until each of them has signed it. Peoples Drug Stores, Inc., 191 Md. at 494, 62 A.2d at 275-76. See Binder v. Benson, 225 Md. 456, 462, 171 A.2d 248, 250 (1961); Eastover Stores, Inc. v. Minnix, 219 Md. at 665-66, 150 A.2d at 888. The Restatement of Contracts provides an example:

A signs and seals a document containing promises by him and by B and hands it to B for execution. Until B executes it, neither party is bound.

Restatement (Second) of Contracts Sec. 105, illustration 1 (1979).

Here, the record demonstrates only the final fully executed agreement was intended to be binding. The contract was extensively negotiated and redrafted. The Memorandum of Understanding which was antecedent to the Settlement Agreement recited the parties' intent to "draft and execute a Definitive Agreement" embodying the terms of settlement. (Emphasis supplied). The Settlement Agreement apparently required signatures of all parties, having been constructed with blank lines left for the parties to the contract to sign. The agreement was post-dated as of the day of settlement, further indicating only a fully executed version was intended to represent the binding contract. Moreover, when the Settlement Agreement, signed by Eaton in Maryland but unsigned by Continental, was forwarded after Eaton's signature to Continental in Massachusetts, where it affixed its signature, Continental held a directors meeting to approve the contract, clearly implying that it did not intend to be bound until it signed.

Thus, as the contract did not become binding on Eaton until Continental signed it, the choice of Maryland substantive law as the law of the place of contracting appears fallacious. The law of Massachusetts, where the last act necessary to complete the contract was performed, controls.

If the proposal is put forth that, not the original executed version, but the second or conformed copy, amounted to the contract on the grounds that it was signed by Continental before being forwarded to Eaton, who executed it in Maryland, an answer amounting to a refutation is simple. Upon joint execution of the original version, a contract existed. The conformed copy only served the purpose of affording Eaton credible evidence that the first version had been signed and was in existence.9

Having decided the question of what state's substantive law to apply, we turn to the question on the merits, where we are confronted by the claim of United Broadcasting that the contractual right of first refusal was entirely void because it offended the Rule Against Perpetuities. Massachusetts courts adopt Professor Gray's general formulation of the Rule, finding a property interest void "unless it must vest, if at all, not later than twenty-one years after some life in being at the creation of the interest." Certified Corp. v. GTE Products Corp., 392 Mass. 821, 823, 467 N.E.2d 1336, 1338 (1984). See J. Gray, The Rule Against Perpetuities Sec. 201 (4th ed. 1942). That, of course, means either or both a) a life or lives in being or b) twenty-one years. Gray, supra, Sec. 223; Leach & Tudor, The Rule Against Perpetuities Sec. 2414 (1957). See Certified Corp., 392 Mass. at 825-26, 467 N.E.2d at 1339. Massachusetts courts apply the Rule Against Perpetuities as a rule of law, not construction, Springfield Safe Deposit and Trust Co. v. Ireland, 268 Mass. 62, 167 N.E. 261 (1929), applicable to interests in both realty and personalty. Albee v. Carpenter, 66 Mass. 382, 12 Cus.H. 382 (1853).10

Initially, it is clear that a right of first refusal is a type of option. IV Restatement of Property Sec. 413 Comment (E). An option to purchase property creates a contingent equitable interest in the option holder. Certified Corp., 392 Mass. at 824, 467 N.E.2d at 1338 (1984). Such contingent future interests in property have been found to implicate the provisions of the Rule Against Perpetuities.11 Certified Corp., supra; see Ferrero Construction Co. v. Dennis Rourke Corp., 311 Md. 560, 565-66, 536 A.2d 1137, 1139-40 (1988) (citing cases). See generally J Gray, The Rule Against Perpetuities, Sec. 330 (4th ed.1942). See also Leach, Perpetuities in A Nutshell, 51 Harv.L.Rev. 638, 660-662 (1938) (criticizing the Rule's applicability to contracts, particularly options).

Indisputably, the limit of duration to lives in being plus twenty-one years, requiring the vesting of a contingent interest in that time frame, is not facially met here,12 at least if the language in which the Settlement Agreement is couched is not approached in terms of what it actually expressed and how an exactly equivalent use of language could be applied in a manner not voiding on Rule Against Perpetuities grounds much of the right of first refusal we have here. The Settlement Agreement purports to confer "a right of first refusal to acquire the shares of stock of United constituting its controlling capital stock interest (the "Control Stock") in each instance before ... any shares of the Control Stock may directly or indirectly be sold or transferred to any third person or persons." As written, the right of first refusal would at first blush appear to be unlimited as to time. See Gray v. Whittemore, 192 Mass. 367, 370, 78 N.E. 422, 425 (1906) (holding a mere possibility that an interest will vest in time is insufficient); Hall v. Hall, 123 Mass. 120, 124 (1877) ("Executory limitations are void unless they take effect ex necessitae and in all possible contingencies" 'within the period of the rule.' ").

However, the question of whether and in what manner the Rule Against Perpetuities applies is not devoid of complexity. Consider language (1) conferring a right of first refusal to Continental during the first twenty-one years of the contract's existence,13 followed by language (2) granting a separate right of first refusal thereafter to Continental.14 That language says, as a substantial matter, exactly what the Settlement Agreement, in a form of aggregation or shorthand, says. Yet the first grant, which would cover the circumstances at bar, would be valid under the Rule, while the second would be void due to its overly long duration. The question before us is whether this or some other interpretation is available to preserve, at least in some measure, the intent of the original contracting parties from the policy mandate of the Rule.

The Rule Against Perpetuities was common law of relatively recent origin, it first beginning to appear in England in the Seventeenth Century. While existence of the doctrine's origins was still comparatively new, Lord Nottingham, to answer a question as to how far the doctrine would reach and what limitations or alterations would apply, provided the impressive, if imprecise, response: "I will stop wherever any visible inconvenience doth appear." Duke of Norfolk's Case, 3 Ch. Cas. 1, 49 (1682).15 We are called upon in the present case to consider if and to what extent "visible inconvenience doth appear," as well as to if and to what extent it does not, and seek to ascertain the law to achieve a sensible and equitable result.

When undertaking to construe and apply the Rule Against Perpetuities, a court will be well-advised to investigate and appreciate the history of the rule and its application. It did not come upon us in customary common law fashion. That is, it did not represent a slow, even microscopic growth analogous to that of a Pacific island erected by accretion of billions of small coral creatures over a substantial period of time. Rather, the Rule Against Perpetuities grew by leaps and bounds, rather like the piling up of immense blocks of limestone, constituting (in some minds apparently) a common law temple, suddenly locked in place.16 See generally Gray, supra Secs. 153-170.

[T]he public welfare was threatened by the desires of the great families to parcel out the soil of England among them and impose upon it the dead-hand control of perpetual family settlements. Two centuries earlier the courts had nullified the Statute De Donis by permitting disentailment, and these judges did not now propose to allow the innovations of the Statute of Uses to create new "perpetuities." The threat was real. A firmly restrictive rule was called for.

Leach, Perpetuities in Perspective, 65 Harv.L.Rev. 725-26 (1952).

As may be expected with newly fashioned doctrine abruptly superimposed on the common law landscape, its use has led to some strange anomalies. It is true that Lord Nottingham, in announcing the principal culminating factor in the invention of the Rule Against Perpetuities, provided some apparent flexibility when he limited a contingency only to "visible inconvenience". See Duke of Norfolk's Case, supra. The predicted flexibility, even in the case of transfers not donative in nature, however, has to a substantial extent been unrealized.

As the rule has been applied since it saw, in developed form, the light of day in the 1680's, it more often than not has led to a frustration of the parties' interests, although a small alteration, of form merely, not of substance, would not disturb the objectives of the rule and would succeed much more completely in meeting the parties' intent. It is true, nevertheless, that there have been sometimes successful attempts to meet the case with an appropriate modification which is insubstantial in effect; if not to the rule, then to the proper interpretation of the grant or transfer to which the rule is to be applied. That is what happens when infinity is not treated in a summary, short-hand fashion but is divided into its component parts, i.e., for example, twenty-one years, plus infinity thereafter. Common law lawyers have not entirely forsworn the techniques of purely formal adjustments to accomplish increased fairness. Rather as to such moderations lawyers have grown accustomed to live with them. As the Restatement notes: "It is ... necessary to keep in mind that the rule against perpetuities is subject to judicial growth and change to reflect current policy considerations." Restatement (Second) of Property, Pt. 1, at 11. Massachusetts has on occasion displayed some flexibility. Thus, rather than invalidating an overly long power of appointment from its inception,

"as applied to the exercise of a power of appointment the words of the rule are satisfied if it appears that in the light of facts as to relationship and longevity existent when the appointment is exercised, the estates created in truth will vest and take effect within the period limited by the rule, although this may not have been certain at the death of the donor of the power."

Minot v. Paine, 230 Mass. 514, 522, 120 N.E. 167, 170 (1918). Accord Sears v. Coolidge, 329 Mass. 340, 108 N.E.2d 563 (1952); Fiduciary Trust Co. v. Mishou, 321 Mass. 615, 75 N.E.2d 3 (1947), overruled on other grounds, Powers v. Wilkinson, 399 Mass. 650, 506 N.E.2d 842 (1987).

Elsewhere, unvested contingencies, on occasion, have been treated as divisible so that the part of an interest that must vest in time will be upheld and only the more remote portion voided. For instance, where a gift is made upon either of two expressed contingencies, one being remote and one not, the gift takes effect if the valid contingency occurs. Gray v. Whittemore, 192 Mass. 367, 78 N.E. 422 (1906). See Leach, Perpetuities in a Nutshell, 51 Harv.L.Rev. at 654.17

It has been recognized that a grant may be severable in determining whether part of it may be saved and only the other part be held void. See, e.g., Coelenbier v. DeSommery, [1912] 2 Ch. 622 (where testamentary power was held to be divisible into two distinct powers, one of which was open to objection because of the Rule Against Perpetuities, the court merely avoided that power and gave effect to the power which was not open to objection); Attenborough v. Attenborough, (1855) 1 K & J 296.18

Likewise, a gift to a class, of which some future members may implicate the Rule, has been divided into separate gifts, one good, the other bad. For example, in Re Estate of Birkner, 90 N.J.Super. 91, 216 A.2d 258 (1966), a disposition of annuities to grandchildren who survived the testatrix was held valid with respect to those living at her death, but invalid with respect to unborn grandchildren. To the same effect, in Herbert v. Webster, (1880) 15 Ch.D. 610, a sum was settled in trust for present and future children in equal shares, with a restraint on anticipation of the daughters' shares and some daughters were in esse at the time the trust came into being while others were not; in such a case, to carry out the settlor's intention and to avoid the Rule Against Perpetuities, the gift was read as of the shares separately, thus validating the shares of the daughters who were already alive when the trust was settled. In re Ferneley's Trust, [1902] 1 Ch. 543, held that a restraint on anticipation imposed by a general clause in a will upon all the shares of daughters of testator's children is good as to the shares of those members of the class who were born in testator's life, though void as to the shares of those born afterwards. Accord Garne v. Tennent, [1907] 1 Ch. 276. Other courts, too, have on occasion crafted an exception, when it would not disturb a testamentary scheme, to the usual rule of "all or nothing" and divided a gift so as to save those shares within the period permitted by the rule. See, e.g., Shepard v. Union & New Haven Trust Co., 106 Conn. 627, 138 A. 809 (1927); Ryan v. Ward, 192 Md. 342, 64 A.2d 258 (1949).

However, such slight modification or clarification in the language to which the Rule Against Perpetuities applies will not justify a radical alteration in the Rule itself. An effort fails if it seeks to accomplish too great a change. See generally Ferrero, supra, 311 Md. at 567, 536 A.2d at 1140. Therefore, a wholesale disregarding of the rule on the grounds that interests other than real property interests are involved has not succeeded. See, e.g., Ramage v. First Farmers & Merchant's National Bank, 249 Ala. 240, 30 So.2d 706 (1947). Similarly, efforts to take interests created by contract, especially contracts commercial in character, totally out of the rule, have failed. See generally Leach, Perpetuities in Perspective: Ending the Rule's Reign of Terror, 65 Harv.L.Rev. 721, 737-38, 748 (1982). Yet efforts small in scope, making more specific the terms rather than altering the meaning of a transfer, to achieve escape from the rule in a particular case have on occasion been successful. See, e.g., Sears v. Coolidge, 329 Mass. at 346, 108 N.E.2d at 567 (in upholding a trust arrangement reserving a power of appointment to the settlor, which was otherwise void under the rule, the court looked to the circumstances at the death of the settlor, rather than at the execution of the deed, deeming it "wise not to apply unmodified a remorseless technical principle to a case which it did not fit"); Minot, supra. See also Franklin v. Spadafora, 388 Mass. 764, 768, 447 N.E.2d 1244, 1247 (1983) (in measuring in Rule Against Perpetuities terms the durational validity on restraints on alienation grounds of a bylaw restricting the number of condominium units that could be owned by any one party, the court "decline[d] to apply the Rule [Against Perpetuities] to a form of property ownership" unknown at common law); Borland's Trustee v. Steel Brothers & Co. Ltd., [1901] 1 Ch. 279.19

Returning to our suggested division into two rights of first refusal, one limited in duration to twenty-one years and another applying at all times thereafter, the approach is supported by the consideration of no little moment that a contract providing exactly the same things as the Settlement Agreement ordains would read:

1) a right of first refusal to Continental during the first 21 years of the contract's existence; followed by

2) a right of first refusal to Continental indefinitely thereafter.

Only 2) should be voided while 1) should remain vested from the outset if viewed from the holder's, i.e., Continental's, point of view, or at least will vest if at all within twenty-one years of its creation so far as the would-be seller, that is United or United Broadcasting, is concerned.20 See Springfield Safe Deposit & Trust Co., supra, 268 Mass. at 67-68, 167 N.E. at 263 (if two alternative contingencies are proved and only one is valid, under the Rule, the grant is still effective on the happening of the valid contingency). Accord Sears, supra. See also Gray v. Whittemore, supra. The twenty-one year contingency would not, in any event, be visibly (or, for that matter, invisibly) inconvenient in duration, and hence it is valid.

It would seem apropos at some point to consider, even if only by the way, the question of the parties' intent in including the right of first refusal in the Settlement Agreement. The intent behind that portion of the document is not searchingly addressed in the briefs or record. Nevertheless, it is safe to assume that Eaton and United Broadcasting expected possibly to have to part with something of substance. If they were agreeing to the terms of the Settlement Agreement in the expectation that one significant portion, the language creating the right of first refusal, would be voided in its entirety on Rule Against Perpetuities grounds, a serious question would arise as to whether there has been a knowing misrepresentation by Eaton and United Broadcasting of a presently existing intent when the Settlement Agreement was entered. The statute of limitations might have been tolled in such a case, so far as a tort action for fraud is concerned, until the first assertion of the Rule Against Perpetuities has occurred. Brodeur v. American Rexoil Heating Fuel Co., Inc., 13 Mass.App. 939, 430 N.E.2d 1243, 1245 (1982); Frank Cooke, Inc. v. Horwitz, 10 Mass.App. 99, 406 N.E.2d 678, 683 (1980). Continental, presumably with reason, regards United Cable as worth more to it than the price it will have to pay under the right of first refusal.

Conversely, it stretches the imagination beyond limit to accept that Continental knowingly and intentionally took the risk that Eaton and his corporations could be expected to regard themselves as bound to give effect indefinitely--for perhaps thousands of years--to the right of first refusal. Such an unquestioning acceptance of so unwieldy a burden by Eaton and United Cable, with the Rule Against Perpetuities looming broodingly in the background, is virtually impossible to assume. It is much more realistic to conclude that Continental realized that the termination of the right of first refusal would have to occur at some reasonable time. In the absence of any specific delineation of the right's life span, the life expectancy of twenty-one years best accords with the facts presented by this case and by pertinent law.

Having proceeded thus far on the question of the parties' intent as to duration of the right of first refusal, it would appear that what the Settlement Agreement provides, perhaps insofar as strict linguistic accuracy is concerned, but not in terms of reality, if severability is considered, is "always" so far as Continental has read the Settlement Agreement, "never" for Eaton, his wholly owned corporations, and their successors. Neither is a satisfactory answer, and that suggests a more agreeable response in the absence of viable alternatives, namely: a "reasonable" time, not to exceed the period prescribed by the rule. See Childs v. Sherman, 351 Mass. 450, 455-56, 221 N.E.2d 748, 751 (1966); Yentile v. Howland, 26 Mass.App. 214, 525 N.E.2d 689, 691 (1988).

We recognize that by pursuing the route of the parties' intent we have, thus far, only touched on the possible maximum allowable limit of duration (twenty-one years), not on what was actually the product of a meeting of minds. The parties did not have the foresight to include a savings clause, see Boston Safe Deposit & Trust Co. v. Collier, 222 Mass. 390, 111 N.E. 163 (1916), or other indicia of their intent. In some circumstances, that would suggest a remand for a determination of a reasonable length of time, either twenty-one years or such lesser period as appears to have been mutually intended, the life of Eaton say, or a duration of no more than ten years. That might bring victory to United Broadcasting, depending on when it might be determined by the factfinder that the right of first refusal was first activated. Or it might be seventeen years or more, in which case the victory would redound to the benefit of Continental.

Two obstacles to the calling for a remand loom up. First, the parties have not phrased arguments along such a line, United Broadcasting steadfastly having contended that the right of first refusal was void from the outset and Continental having appeared to press for eternity. Second, the record affords no sufficient evidence of what would be a reasonable duration for the right of first refusal.

Bearing in mind the extensive amount of court time already expended, and the capabilities of counsel on both sides without the subject coming up, we conclude that twenty-one years, i.e., to a date in 1996, is the correct and reasonable maximum length of life for the right of first refusal. Of course, the attempt at a sale of control has shortened the actual period. No loaf at all, for which United Broadcasting has striven, is less satisfactory an answer than half-a-loaf, the historically acceptable twenty-one years, with which Continental must now be satisfied.

The solution, under Massachusetts law, of a twenty-one year duration for the life of the right of first refusal avoids impenetrable uncertainty, does no violence to the intent of the parties, and further renders it unnecessary for us to wrestle with the question of whether Massachusetts and Maryland law would each decree that here we have a vested interest, the right, in a contingent interest, the first refusal. If so, we would have to address the question of whether the right of first refusal is, therefore, wholly, or sufficiently for Continental's purposes, valid on those grounds. See Putnam v. Story, 132 Mass. 205, 211 (1882) (speaking of a "vested interest in a contingent remainder"); In re Banks' Will, 87 Md. 425, 443, 40 A. 268, 274 (1898) ("[T]here is a wide difference between a vested interest in a contingent remainder, which is an existing estate, and a contingent interest") (emphasis in original); accord Reilly v. Mackenzie, 151 Md. 216, 221-22, 134 A. 502, 505 (1926).21 After all, the rule only invalidates interests which vest too remotely; not those that merely last too long. Seaver v. Fitzgerald, 141 Mass. 401, 6 N.E. 73 (1881); Ferrero, supra, 311 Md. at 572-73, 536 A.2d at 1142. Cf. Proprietors of Church v. Grant, 69 Mass. 142, 33 Gray 142 (1855) (Rule applies even when there is no tying up of property interests or restraint on alienation).

While that might spare our having to decide the initial question of whether Massachusetts or Maryland substantive law applies, we have, indeed, concluded that Massachusetts substantive law controls. We have further, then, decided that, applying Massachusetts law, there is here a valid right of first refusal since it must vest, if at all, within twenty-one years.

The possibility that the spectre of a restraint on alienation might be adverted to with regard to the interest for the first twenty-one years need not long detain us. The contention conceivably could arise since sale to anyone other than Continental will have been foreclosed so long as Continental has expressed an intent to exercise the right of first refusal. See Ferrero Construction Co., supra. See also Certified Corp., supra, 392 Mass. at 825, 467 N.E.2d at 1339 (an option to purchase " 'imposes an immediate restraint upon alienation of the owner' of the property for the period during which the option may be exercised") (quoting Eastman Marble Co. v. Vermont Marble Co., 236 Mass. 138, 153, 128 N.E. 177, 182-83 (1920)). Massachusetts courts, utilizing the term of the Rule Against Perpetuities as a durational yardstick, have construed such restraints upon alienation in a flexible manner, so as not to invalidate private contracts and transactions on technical grounds. See, e.g., Franklin, supra (durational validity of restraint on alienation not gauged by normal measure of Rule Against Perpetuities, where property is of type unknown to common law); Sears, supra (refusing to apply "unmodified" the rule "to a case which it did not fit"). As long as the duration is confined to a reasonable time, i.e., within the period of the rule, cf. Roberts v. Jones, 307 Mass. 504, 30 N.E.2d 392 (1940) (holding restraint on alienation whose duration was longer than period of the Rule unreasonable), we have here no restraint on alienation which should be legally cognizable as such, for the owner whose stock is subject to it remains essentially free to sell at a satisfactory price if a genuine would-be buyer can be found. See New England Trust Co. v. Abbott, 162 Mass. 148, 38 N.E. 432 (1884); Metropolitan Transportation Authority v. Bruken Realty Corp., 67 N.Y.2d 156, 501 N.Y.S.2d 306, 492 N.E.2d 379 (1986). Cf. Ferrero, supra. The right to exercise a whim as to which buyer to prefer, when the price is exactly the same whoever purchases, whatever the effect to be given to such a right of unreasonably long duration, is not an object the rule forbidding restraints upon alienation is designed to protect where its duration is but for at most twenty-one years and commercial property such as television company franchise stock is what is subject to the right.22

Inherent policy concerns also militate against finding the subject provision completely void on perpetuities grounds. The Rule Against Perpetuities, as it first arose, was a rule addressed to conveyancing in the situation of donative property right settlements not usually or in a traditional manner concerned with commercial considerations. See Childs, supra, 351 Mass. at 455-56, 221 N.E.2d at 751 (1966).23 It is true that the doctrine first arose with respect to interests in real property, and contentions of non-applicability of the Rule Against Perpetuities in other than real property situations have been made in some cases with some limited success. E.g., Borland's Trustee v. Steel Brothers & Co. Ltd., [1901] 1 Ch. 279; South Eastern Ry. Co. v. Associated Portland Cement Manufacturers (1900) Ltd., [1910] 1 Ch. 12. See London & Southwest Ry. Co. v. Gomm, (1882) 20 Ch.D. 562, 580 ("If it is a bare or mere personal contract it is of course not obnoxious to the rule"); Eastman Marble Co., 236 Mass. at 152, 128 N.E. at 182 ("The contract in the case at bar is not a mere option to purchase. If the contract had been a simple personal agreement of that sort, it would have given ... to the plaintiff no interest in the property." (citation omitted)). Nevertheless, contentions that commercial transactions or actions involving interests in personal property should be exempt from the Rule Against Perpetuities, in a general, unfettered way, have been unsuccessful in Massachusetts. See Fiduciary Trust Co. v. Mishou, supra (personal property); Certified Corp., supra (commercial transaction). Cf. Mass.Gen.L. ch. 184A, Sec. 1. Yet Massachusetts courts have, on specific occasions, narrowly construed questionable provisions or liberally implied durational limitations to avoid harsh inequities caused by unrelenting application of the rule and a consequential defeat of the grantor's or the contracting parties' intention. See, e.g., Childs, supra; Yentile, supra; Brandenburg v. Thorndike, 139 Mass. 102, 28 N.E. 575 (1885).24

Certainly it appears evident that for unreasonable restraint on alienation reasons as well as on Rule Against Perpetuities grounds, a right of first refusal could not properly extend for hundreds, indeed theoretically even thousands, of years. The authorities are sparse as to whether a right of first refusal as to the sale of stock must indeed comply with a rule concerning durational restraints upon alienation. We feel it probably must in some respects. Cf. Ferrero Construction Co., supra. See Certified Corp., supra, 392 Mass. at 825-26, 467 N.E.2d at 1339. However, for what would be a reasonable period of duration, i.e., twenty-one years, a visible inconvenience doth not materialize. Indeed a grant for all of the twenty-one years following the life of Eaton, would not seem unreasonable, but we do not need to decide precisely that question. Here, the right of first refusal has vested within fifteen years. In fashioning of the law of the Rule Against Perpetuities for commercial transactions of the kind here involved, to require a modification from the somewhat unnecessarily all embracing, intention frustrating wooden disregard of the testator's or settlor's intent which applies when land transactions of a non-commercial kind are concerned, would appear to be appropriate.25 We, however, only read language in line with its true intent, applying the Rule in its altogether rigorous form to the language thus determined.

It is our judgment that the contention of United Broadcasting that the right of first refusal should be struck down in its entirety unnecessarily reaches a result visibly inconvenient and one never contemplated by those active in creating the Rule Against Perpetuities and in its evolution. Business is an unlikely place to encounter an "unborn widow" or a "fertile octogenarian." See Leach, Perpetuities in a Nutshell, 51 Harv.L.Rev. at 638 (the period of a life in being and 21 years thereafter has no significance in the world of commercial affairs).

We cannot overlook that Continental has, upon entering the Settlement Agreement, terminated litigation which must have been of considerable potential value. The right of first refusal received substantial attention from both parties in negotiating and drafting the agreement. The record indicates that it formed a major part of the consideration Continental received in return for foregoing its potentially meritorious legal claims for already in excess of fourteen years. Continental would, to date, lose, in large measure, the benefit of its bargain. We would be confronted with difficult questions of unjust enrichment and how to value and otherwise deal with it were we to determine that the right of first refusal was in its entirety from the outset null and void. We, to the contrary, regard it as a simpler and fairer solution to uphold the right of first refusal for the fixed period named in the Rule Against Perpetuities, namely, twenty-one years. That is an approach much more in accord with the parties' intention and free of any complaint that it prevents vesting for an unreasonable period of time.

Consequently, we reverse and remand, ordering the district court to implement this opinion in a manner consistent herewith.

REVERSED AND REMANDED.

I fully concur with the result reached by the majority and in large part with the analyses employed by Judge Murnaghan in his fine opinion. I write separately only to clarify what I believe is dispositive to the Rule Against Perpetuities ("RAP") issue.

In my view, the majority properly states the RAP as it is formulated in Massachusetts and properly concludes that the Massachusetts courts would apply the RAP to the right of first refusal held by Continental. I also agree that the plain language creating the right violates the RAP.

From this point, I am concerned that the majority's analysis, although essentially correct, becomes somewhat unclear. The Massachusetts courts have repeatedly expressed their reluctance to mercilessly apply the RAP in a way that works a commercial injustice. See Childs v. Sherman, 351 Mass. 450, 221 N.E.2d 748, 751 (1966); Yentile v. Howland, 26 Mass.App.Ct. 214, 525 N.E.2d 689, 691 (1988). This concern is paramount in this case. If United Broadcasting were now, through the RAP, allowed to negate the right of first refusal which was the primary concession it made in settling its previous litigation with Continental, it would be unjustly enriched in a way that these two sophisticated corporate entities never envisioned. In such a situation the Massachusetts courts would apply the RAP "reasonably, in light of its objectives and the economic conditions of modern society." Childs, 221 N.E.2d at 751. To prevent this windfall to United Broadcasting, the Massachusetts courts would view this right of first refusal as viable as long as it vests within "a reasonable period of time" not to exceed the period of the RAP. Id. That is exactly the result this Court reaches today. Our holding does nothing more.

The majority discusses a wide range of RAP-saving techniques and toys with the notion of "interpreting" the right of first refusal to in actuality be two rights of first refusal: (1) a contingent right existing the first 21 years of the contract; and (2) a contingent right existing for an indefinite time thereafter. Such an interpretation would certainly be creative, but just as certainly would be unsupported by the law of Massachusetts, the law which necessarily controls our decision. My reading of the majority opinion, however, leads me to conclude that this rationale is not the one finally relied upon to decide this case. At 727. Rather, we hold only that Continental's right of first refusal will last for "a reasonable time," in this instance, 21 years. Id. at 727. Because Continental's right has been exercised within this period, it does not violate the RAP. It is with this understanding that I concur in the majority opinion.