Comments on: MBE Question of the Day #37

By: Maryann Herman

Maryann Herman — Fri, 05 Feb 2010 16:33:21 +0000

Answer D is correct. Usually, in an action for specific performance, an agreement to convey land must satisfy the Statute of Frauds. The Statute is satisfied if the contract to convey is evidenced by a writing or writings containing the essential terms of a purchase and sale agreement and signed by the party against whom the contract is to be enforced. If there is no written agreement, a court of equity can specifically enforce an oral agreement to convey only if the part performance doctrine is satisfied. In a majority of jurisdictions, part performance is proven when the purchaser pays the purchase price, has possession of the land, and makes improvements on the land, all with the permission of the seller. No jurisdiction is satisfied by payment of the purchase price alone. Since there is no written purchase and sale agreement in this case, the purchaser can prevail only if he can show conduct sufficient to satisfy the part performance doctrine. However, payment of the purchase price alone is never sufficient to satisfy the doctrine.

Answer A is incorrect. The fact that the purchaser has performed all of his obligations under the contract will not suffice. Usually, in an action for specific performance, an agreement to convey land must satisfy the Statute of Frauds. The Statute is satisfied if the contract to convey is evidenced by a writing or writings containing the essential terms of a purchase and sale agreement and signed by the party against whom the contract is to be enforced. If there is no written agreement, as here, a court of equity can specifically enforce an oral agreement to convey only if the part performance doctrine is satisfied. In a majority of jurisdictions, part performance is proven when the purchaser pays the purchase price, has possession of the land, and makes improvements on the land, all with the permission of the seller. No jurisdiction accepts payment of the purchase price alone as proof of part performance. Since all the purchaser did is pay the purchase price, he is not entitled to specific performance. Therefore, B is incorrect.

Answer C is incorrect. Return of the purchase price will not preclude enforcement of a purchase and sale agreement if the agreement is otherwise enforceable either under the Statute of Frauds or the part performance doctrine. In this case, the oral agreement is not enforceable. Also, “clean hands” are required of the plaintiff in an equity action. The cleanliness of the defendant’s hands is irrelevant.

By: shahin

shahin — Fri, 05 Feb 2010 15:58:05 +0000

Answer D

By: Steve

Steve — Fri, 05 Feb 2010 15:20:57 +0000

D. the seller will win b/c land is unique and it must be in writing, SF. Court of equity for SP will not look at an oral K b/c there is not valid and definite terms (other element inadequate legal remedies, mutuality, feasibility and defenses).

By: Ken

Ken — Fri, 05 Feb 2010 06:08:41 +0000

D –statute of frauds; the contract is basically voidable soon after conception!!!!

By: Ken

Ken — Fri, 05 Feb 2010 06:06:41 +0000

D –statute of frauds

By: Wrelyea

Wrelyea — Fri, 05 Feb 2010 02:10:43 +0000

Exceptions to the Statute of Frauds

An agreement may be enforced even if it does not comply with the statute of frauds in the following situations:

Merchant Confirmation Rule, under the UCC. If one merchant sends a writing sufficient to satisfy the statute of frauds to another merchant, the merchant has reason to know of the contents of the sent confirmation and the receiver does not object to the confirmation within 10 days, the confirmation is good to satisfy the statute as to both parties.

Admission of the existence of a contract by the defendant under oath,
Part Performance of the contract. The agreement is enforceable up to the amount already paid, delivered, etc.

The goods were specially manufactured for the buyer and the seller either 1) began manufacturing them, or 2) entered into a third party contract for their manufacture, and the manufacturer cannot without undue burden sell the goods to another person in the seller’s ordinary course of business– for example, t-shirts with a baseball team logo or wall-to-wall carpeting for an odd-sized room.

Promissory Estoppel can be applied when the charging party detrimentally relies on the otherwise unenforceable contract.

By: BV

BV — Thu, 04 Feb 2010 21:23:07 +0000

D is correct–insufficient part performance (as to part performance doctrine). The payment of $20,000 alone will not take the oral contract out of the Statute of Frauds.

By: RK

RK — Thu, 04 Feb 2010 18:56:07 +0000

D is the best answer. In order to take a land sale contract out of the statute of frauds, there must be payment with either possession or improvements made to the property.

By: Mona

Mona — Thu, 04 Feb 2010 17:18:39 +0000

D is correct. Part performance would have been correct if the payment was coupled with possession of the property or improvements made on the property. The check cannot replace a writing because writing requires the land description, price etc. Therefore A is incorrect and D is correct.

By: Wrelyea

Wrelyea — Thu, 04 Feb 2010 16:56:19 +0000

In real estate sales, if a buyer takes possession by occupying the property, most courts will enforce the contract. In addition, the Statute of Frauds will be suspended if the buyer has made permanent improvements to the property or rendered partial or full payment. In any of these situations a court may uphold the contract despite a violation of the statute of frauds because the parties’ subsequent actions are evidence that a contract existed.

Therefore, Answer A is correct because the purchaser has fully performed, and the bank record can be used as evidence that the contract existed and was fully executed.