Citation. 264 F.3d 344,2001 U.S. App
Law Students: Don’t know your Studybuddy Pro login? Register here Brief Fact Summary.
A couple sold their house when relying on another person’s oral promise to sell them land.
Synopsis of Rule of Law.
An oral contract for the sale of land is enforceable if it is established that the party reasonably relied on the contract and changed his position so that injustice can only be avoided by specific performance of the contract.
Facts.
Gladys Green (Defendant) owned a parcel of property that she wanted to sell. She discussed with the Hickeys (Plaintiffs) their purchase of the lot, and orally agreed to a sale. Plaintiffs provided a deposit for the land. Plaintiffs told Defendant that they were selling their home and building on her lot. Plaintiffs then sold their home. Defendant told Plaintiffs that she would not sell her property to them because there was a better deal elsewhere. Plaintiffs sought specific performance, and Defendant defended with the statute of frauds.
Issue.
When a person acts in reliance on an oral promise to sell land but the seller then changes his mind, can an action for specific performance be successfully brought?
Held.
Yes.
Under the Restatement (Second) of Contracts, Section: 129 (1981), “a contract for the transfer of an interest in land may be specifically enforced notwithstanding failure to comply with the Statute of Frauds if it is established that the party seeking enforcement, in reasonable reliance on the contract and on the continuing assent of the party against whom enforcement is sought, has so changed his position that injustice can be avoided only by specific enforcement.”
Defendant knew Plaintiffs were selling their home to buy her lot. Plaintiffs made a quick sale in reliance on her promise. Neither party used lawyers in their transactions. Defendant admits to making the oral contract.
Defendant made a promise, which Plaintiffs relied on and she repudiated because of a better offer. The rapid sale of the house was appropriate and expected because of the nature of their deal.
Discussion.
A change in position in reliance on an oral agreement will entitle a purchaser to specific performance, especially if the seller admits that the oral contract was made.
