Pg 46 Flashcards
What are the elements for statute of frauds?
– Contract – identity of parties – identity of land – words indicating a present intent to buy or sell – signature of the party to be charged
What is involved in the element for the statute of frauds that is contract?
Offer, acceptance, consideration
If parties cannot agree on a price in a land sale contract, under the statute of frauds, what happens?
The court assumes a reasonable price
If financing is an issue involved in a land sale contract, what is necessary?
That it be detailed in its terms and included in the writing
What is required under “identity of parties“ as an element of statute of frauds?
Name and title. For example “mother of Johnny“, but not “seller”
What is required under the “identity of land“ element of statute of frauds?
Formal land description, full address, and it must be definite and certain.
If a description of the identity of land is vague, what is needed in order for the SOF to be met?
Extrinsic evidence is used to clarify ambiguity in the writing. It cannot be admitted if there is no description of the land in the writing though.
What is involved in the element for SOF that requires “words indicating present intent to buy or sell“?
Sufficiently definite wording to show with reasonable certainty that the contract was made by the parties. The entire instrument is considered to figure out intention
What is required for the element of SOF that requires “signature of the party to be charged“?
The person that is in trouble over the contract must sign it. Because it’s impossible to know at the outset who that will be, it is smart to always have both parties sign.
If only one person signs a land sale contract, under the SOF who is bound?
Only that person, the other one can escape enforcement
What are things that can be included in a signature under the SOF?
Ink, pencil, stamp, printed, initials, arbitrary marks or symbols if done with the intention to authenticate
If a fact pattern is silent about whether a party signed a land sale contract, what should be assumed under the SOF?
That it was signed
Are oral rescissions of a land sale contract OK?
Yes
Is it OK to make oral modifications of a land sale contract?
No
What does a modification to a land sale contract do?
It creates a new contract with the terms of the old one and new terms that modify it.
Are modifications to contracts usually upheld?
Yes because of estoppel
When are oral modifications to a land sale contract upheld?
A modification usually becomes a waiver and if it was detrimentally relied on, that estops the other party from enforcing the contract’s original terms
What is a situation where a modification that was made orally to a land sale contract will be upheld?
If the contract states “Time is of the essence“ and the date for performance, but then there was an oral statement that the party could have extra time, and the party relied on it. It is possible for the one party to revoke as long as he notifies the other party and gives enough time and it doesn’t cause significant hardship. If the notice is too late, the waiver is binding
How can a waiver of a term of a contract be inferred from a party’s conduct?
If you repeatedly accept late performance, that is a waiver of your right to strict performance.
In order to change it you must give notice that timely performance is now required and give reasonable time to comply
What is required in order for part performance to be an exception to the SOF?
Physical possession PLUS: this means one of the two options below:
- One party’s detrimental reasonable reliance on the contract would make it inequitable not to enforce it, OR
- Two out of three of these exist:
– took possession of the property
– made substantial improvements
– paid all or part of the purchase price
If you put a building on land that you do not own what happens to that building?
It becomes a fixture and it belongs to the owner and you have no remedy.
If it was done in good faith thinking that the land was your own, you can ask the court to give equitable relief
What is equitable conversion/risk of loss?
When the parties have entered a contract, the buyer’s interest is converted into real estate and the seller’s interest is converted to personal property. This means that the land is already owned by the buyer in equity, so he has equitable title. That means he has the risk of loss and must pay the full purchase price
What is the executory period?
The period between conveyance and performance of the contract
Once a land sale contract is signed, and before possession occurs, who owns what?
The buyer becomes the equitable owner
When does equitable conversion occur?
When a fully formed contract is signed.
What are some problem situations that might bring up equitable conversion?
Death of a party, storm or fire, change in zoning, government taking the land by eminent domain, etc.
What are the three views regarding risk of loss for land if there is no allocation of the risk stated in the contract?
– Common law equitable conversion/majority view: risk of loss on buyer
– strong minority view: risk of loss on seller
– Uniform vendor and purchaser risk act
What is involved in the common law majority equitable conversion approach to risk of loss for a land sale contract?
The buyer owns the land, so he shoulders the risk of loss because he has equitable title.
How does the common law majority equitable conversion rule apply when eminent domain is involved?
If the government takes property and gives just compensation before closing of a land-sale contract, the buyer must buy the land and can then get the money from the government
How does the common law majority equitable conversion rule apply to insurance?
Equitable conversion puts the risk on the buyer, but:
- if the seller has insurance and gets the full price for the land and recovers from the insurer, he must give an abatement of the insurance recovery.
- if the buyer has insurance and the risk is on the seller, the seller can get abatement by insurance proceeds
Minority view says the insurance is private between the insured and the company
What is involved in a strong minority view regarding risk of loss?
This rejects equitable conversion and puts the risk on the seller because there’s an implied condition that the subject matter of the contract will exist at the time of the conveyance, so if it is destroyed in between, that is failure of consideration and the contract is rescinded. This discharges the parties’ obligations and the seller returns the money that the buyer paid.
- material loss: the seller cannot enforce the contract and must return the buyer’s payments
- minor loss: seller can get specific performance but must give abatement in price to make up for damage
What is involved in the uniform vendor and purchaser risk act regarding risk of loss?
The risk of loss is on the possessor of the land. This is the seller until possession or title passes to the buyer. If the loss is substantial, the buyer can rescind the contract or enforce it with an abatement in the sale price determined by the loss or by the seller’s insurance coverage.
Unless stated otherwise, every contract for property has an agreement that:
- if nothing has been transferred, and some or all of the property is destroyed not by the buyer’s fault, the buyer can get back anything he paid
– if title or possession has been transferred and destruction happens, the buyer is not relieved from his duty
– if the loss is substantial, the buyer can rescind the contract or enforce it with abatement measured by the loss or the seller’s insurance coverage
