Kearns v. Andree

Connecticut Supreme Court · Contracts

ContractsIndefinitenessRestitutionImplied ContractLand Sale Agreementsindefinite contractunenforceable agreementoral land sale

Facts

The plaintiff owned a nearly completed house and orally agreed to sell it to the defendant for $8,500, with the defendant to assume a $4,500 bank mortgage and pay $4,000 cash. The mortgage did not yet exist, and the parties made no agreement as to the identity of the mortgagee or the mortgage terms. After the defendant requested specific changes to the house and the cutting of certain trees, the plaintiff made those changes and obtained a $4,500 bank mortgage, but the defendant refused to complete the purchase. The plaintiff later sold the property for $8,250 after repainting and repapering it to suit the ultimate purchaser, and sought to recover both his expenses and the difference in sale price.

Issue

When an oral land-sale agreement is unenforceable because its terms are too indefinite, may a party who performed work at the other party's request in good-faith reliance on the agreement recover for that performance? If so, is recovery limited to benefits conferred on the defendant, and may the plaintiff also recover later expenses incurred to resell the property?

Rule

If parties attempt to make a contract but the agreement is void because its terms are too indefinite, and one party in good faith, believing a valid contract exists, performs services at the request of the other and in the known expectation of compensation, the law implies an obligation to pay reasonable compensation for those services. The measure of recovery is the reasonable value of the services performed, not the amount of benefit actually received by the defendant, though a proper deduction must be made for any benefit the plaintiff himself retained from the work. Expenses incurred after the defendant's refusal in adapting the property to a later purchaser are not recoverable in such an action because that would effectively enforce the unenforceable contract.

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

In Cleveland, Nora Bennett orally agreed to sell a newly renovated townhouse to Eli Moran for $620,000. Eli would pay $220,000 cash and "take over a mortgage Nora would arrange later," but they never discussed the lender, interest rate, maturity date, or repayment schedule; at Eli's request, Nora replaced the kitchen island and removed a backyard shed before Eli refused to close.

If Nora sues Eli, which is the best statement of her likely recovery under the governing rule?

Explanation. Where parties attempt a contract that is void for indefiniteness, and one party in good faith performs services at the other's request in the known expectation of compensation, the law implies an obligation to pay reasonable compensation. The measure is the reasonable value of the services, not the benefit actually received by the defendant, though the award must be reduced by any benefit retained by the plaintiff. (Derived from Kearns v. Andree (n.d.).)