Case Study: Real Estate Contract
Pat was very frustrated because she wanted to purchase a home but lacked the funds or credit to do so even though Pat was expecting shortly to receive a one-half million dollar final installment payment for some land she sold several years earlier. Dan knew that Pat was very interested in purchasing a home and approached Pat with a proposal to assist Pat in buying a home. Dan told Pat that he would help Pat with the financing. After finding the home she wanted to buy for $250,000, Dan and Pat orally agreed that Dan would purchase the home and "when you come up with the money, I (Dan) will sell it to you (Pat) for $250,000 plus a fair commission to be determined."
Dan purchased the home identified by Pat and the following week Pat moved in and began living in the house. During the first six months after moving in, Pat installed new carpeting, window coverings and a patio cover at a cost of $8,000. Pat also mailed to Dan a check for $1,000 each month, with a note enclosed with each payment. In each note, Pat asked Dan, "Tell me what a fair commission isI want to finalize our deal." Dan cashed the checks each month, but failed to respond to Pat's notes.
Eleven months after moving into the home, Pat received the half-million dollar installment check. Pat immediately went to Dan with a check for $275,000 and asked Dan to convey the property to her according to their agreement. Dan refused to accept the check and ordered Pat to move out.
If Pat brings an action against Dan, what are the legal issues involved in this action and how should each be resolved? Discuss.
Issue: Is Dan liable to Pat for breach of contract.
Rule: Here the agreement between Pat and Dan falls outside of Common Law and within the boundaries of the Statue of Frauds. The most relevant of the types of contracts which fall within the Statue of Frauds, is an agreement for the sale of land and for an interest in land, or an agreement by a purchaser of real property to pay an indebtedness
Dan purchased the home identified by Pat and the following week Pat moved in and began living in the house. During the first six months after moving in, Pat installed new carpeting, window coverings and a patio cover at a cost of $8,000. Pat also mailed to Dan a check for $1,000 each month, with a note enclosed with each payment. In each note, Pat asked Dan, "Tell me what a fair commission isI want to finalize our deal." Dan cashed the checks each month, but failed to respond to Pat's notes.
Eleven months after moving into the home, Pat received the half-million dollar installment check. Pat immediately went to Dan with a check for $275,000 and asked Dan to convey the property to her according to their agreement. Dan refused to accept the check and ordered Pat to move out.
If Pat brings an action against Dan, what are the legal issues involved in this action and how should each be resolved? Discuss.
Issue: Is Dan liable to Pat for breach of contract.
Rule: Here the agreement between Pat and Dan falls outside of Common Law and within the boundaries of the Statue of Frauds. The most relevant of the types of contracts which fall within the Statue of Frauds, is an agreement for the sale of land and for an interest in land, or an agreement by a purchaser of real property to pay an indebtedness