Chomicky v. Buttolph

Supreme Court of Vermont · 1986 · Contracts

ContractsStatute of FraudsSpecific PerformancePart PerformancePromissory Estoppelsale of landoral contractoral modification

Facts

Defendants owned lakeside property and had signed a written purchase and sale contract with plaintiffs for the front lot and cottage, contingent on defendants obtaining a subdivision permit. While the permit application was pending, the parties discussed by telephone an alternative arrangement under which defendants would retain only a 50-foot right-of-way if the permit were denied, and Mr. Buttolph later indicated that this arrangement was acceptable if the permit was not approved. After the planning commission denied the subdivision permit, defendants told plaintiffs the deal was off and that they wanted to sell the whole parcel or nothing. Plaintiffs sued for specific performance of the alleged oral contract and also sought damages, relying in part on their financing arrangements, title search, and $5,000 down payment.

Issue

Whether the alleged oral agreement concerning the sale of the property was enforceable despite the Statute of Frauds because defendants allegedly admitted it or because plaintiffs' actions amounted to part performance. Also, whether plaintiffs could recover damages when specific performance was unavailable.

Rule

Contracts for the sale of land or interests in land must be in writing to be enforceable under the Statute of Frauds, and proposed changes or modifications are subject to the same formal requirements as the original agreement. A defendant's admission of an oral land contract does not, by itself, take the contract outside the Statute of Frauds. An oral land contract may be enforced only through the doctrine of part performance, which requires substantial and irretrievable reliance beyond injury compensable by money; preparation for closing and money payments on the purchase are insufficient. Promissory estoppel does not apply where the parties made an agreement and the suit is on that agreement.

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One of 10 multiple-choice questions for this case. Pick an answer to see why.

Nina Patel and Owen Mercer signed a written agreement for the sale of a cabin outside Asheville, North Carolina, contingent on county approval of a new lot line. While the application was pending, they orally agreed by phone that if approval were denied, Owen would instead convey the cabin parcel subject to a narrower access easement. Approval was denied, and Owen refused to close under the oral arrangement.

If Nina sues for specific performance of the oral arrangement, what is the strongest argument for Owen?

Explanation. A contract for the sale of land, and any proposed change or modification of such a contract, must satisfy the Statute of Frauds. The majority treated an oral post-signing change to a land transaction as subject to the same formal requirements as the original agreement. Thus, absent a sufficient exception such as part performance, Owen may invoke the statute to defeat specific performance.