Reference no: EM132002412

John and Lori Finstad granted Ransom-Sargent water Users an option to purchase their farmland and drill water wells. The option also permitted the Finstad’ s to lease the property for up to ten years, provided they only use the land for pasture purposes. Four years later, Ransom-Sargent terminated the Finstad’s lease rights, because the Finstad’s had tilled up some of the land in order to continue receiving government farm payments, the Finstad’s signed a new contract with Ransom-Sargent permitting the Finstad’s to lease the land for one year and to collect government payments for that year. By signing the contract, they also avoided a lawsuit with Ransom-Sargent. The contract included a release of all rights the Finstad’s had to lease the property under the original option agreement. The following year, Ransom-Sargent accepted bids to lease the land. After they were not awarded the lease, the Finstad’s sued Ramson-Sargent, alleging that their second contract was not supported by consideration and that their original option to lease should be upheld. Were they correct?