I. Contract Formation and Statute of Frauds
a. A binding, enforceable agreement for the sale of real property must be stated in a signed writing sufficient to satisfy the statute of frauds.
b. The following contracts are invalid unless they are in writing:
i. Leasing for a period longer than one year
ii. For the sale of property
iii. If made by an agent, then the authority of the agent must be in writing.
iv. An estate in property
v. Options to purchase
vi. Assumption of a mortgage
c. SOF applies to all agreements for the sale of property, even for a settlement agreement.
d. Exception: limited to the oral settlement of real property before the court.
e. Contract formation: don’t confuse with SOF. Must contain:
ii. Absolute Acceptance: the offer’s terms must be met absolutely, precisely, and unequivocally.
iii. A qualified acceptance that purports to accept on new or different terms is simply a counteroffer. The original offer cannot be accepted unless reoffered.
iv. Practice pointer: when a contract is finally accepted, good idea to execute a single document that incorporates all the agreed upon terms.
v. If a contract requires a signature, no signature means no acceptance. No particular signing method is required.
vi. SOF is satisfied by one or more writings. When there are several writings, one or more signed is fine.
f. Equal Dignities:
i. An agent may sign in the place of the party, but the agents authority must be evidenced by a writing signed by the principal.
g. Essential Terms:
i. The writing will be enforceable only if it contains all the necessary and material terms of the parties agreement.
1. must reasonably identify the subject matter of the contract
2. must indicate that a contract has been made between the parties
3. must state with reasonable certainty the essential terms of the unperformed promises in the contract.
ii. The essential terms depend principally on the circumstances of the agreement. Minimum elements that need to be fulfilled:
1. The identity of the parties: agent can sign without disclosing the principal.
2. A sufficient description of the property: parol evidence will ordinarily be admissible to show what property the parties intended to convey and the contract will be deemed adequate if the contract describes something which is certain or provides a means of identifying the property. However, the SOF is not satisfied if the property can be identified only by reference to parol evidence.
3. The purchase price, and the time, terms and manner of payment. As long
iii. However, can have unintended enforceable obligations.
iv. Generally interpreted as the parties objective intent as evidenced by the words used.
v. Can be used for exclusive negotiating agreements.
k. §1624(a): following contracts are invalid without a writing:
i. Cannot be performed within the following year.
ii. Promise to answer for the debt of another
iii. Leasing for more than a year or for the sale of real property
iv. An agreement for agency to buy sell or lease property
v. Not performed during the lifetime of the promisor.
vi. An agreement to pay someone else’s mortgage.
vii. Loaning money greater than $100,000.
l. §1971: no estate or interest in real property, other than a lease for less than a year, can be made other than by an operation of law, can be created without a writing.
Agency and Brokerage