PROPERTY II OUTLINE
Ch. 7 The Land Transaction
i. STATUTE OF FRAUDS- contracts for the sale of land & leases for over 1 year must be in writing to be enforceable. Some times oral agreements are enforceable if fraud is present or unfairness will result otherwise.
SOF requires that the writing include all the essential terms:
•Must be signed by party to be charged
•Description of the property
•Identification of the parties
•the price and manner of payment (ct. may set out a reasonable price if missing, yet price must be mentioned and the method they are going to use in setting the price)
Exceptions to the Statute of Frauds- when Ks can be enforced w/o a writing
Part performance- allows enforcement of oral agreements when acts have been performed by one party (if the act was done only in response to the oral K , the act must be unequivocally referable to the K). Used to prevent unjust reliance on the K ( This doctrine does not award damages)
In Most states for Part performance two of the three must be present:
1) Possession of the land by the purchaser;
2) Payment of part or all of the purchase price; and/or
3) Making substantial improvements
Estoppel- happens when unconscionable injury would result from denying enforcement of the oral K after one party has been induced by the other to change his position in reliance of the K.
Elements of Estoppel- a promise; reasonable reliance and actual reliance by the promisee that results in injustice. (Like in Ks)The seller must know the purchaser is relying.
CASE: 1
Hickey v. Green- (oral agreement for the sale of land, purchasers gave deposit check and sold their house but later seller changed his mind. Buyer sues for specific performance, seller argues SOF)R: A contract for the sale of land may be enforceable although it violates the statute of frauds if the party seeking enforcement reasonably relied on the contract and due to the continuing assent of the party against whom performance is sought, changed his position so that injustice can only be avoided by specific performance.
Note: similar case as Hickey yet the seller did not know the buyer sold the farm, ct. did not impose specific performance b/c the sale of the farm was not in the contemplation and understanding of the parties and was not foreseeable by the seller.
● Tearing up a deed is not sufficient to destroy ownership, ownership is transferred
ion of the description of land from one deed to the next (i.e., descriptions are not consistent)
•Encumbrances include anything that puts a cloud on title: mortgages, liens easements and covenants.
If encumbrance- you take proceeds from sale and put them towards the encumbrance, (i.e., mortgage/lien) thus title MUST be marketable at closing and does not have to be before the closing UNLESS it says time is of the essence courts can give seller a reasonable amount of time to fix the problem.
•Encroachments- if significant then unmarketable; a slight one (i.e., boundary overlap of a few inches) will not render title unmarketable. Some jurisdictions, a visible or known encroachment does not make title unmarketable.
•Zoning restrictions- existence of one does not make title unmarketable, a violation of one may render the title unmarketable.
•Physical defects- (i.e., terminates do not render title unmarketable b/c they don’t affect title, they affect the structure).
