Partial Performance as an exception to the Statute of Frauds?
Question by xearf_09: Partial Performance as an exception to the Statute of Frauds?
I really don’t understand this concept at all:
“In cases involving contracts relating to the transfer of interests in land, a court may grant specific performance (performance of the contract according to its precise terms) of an oral contract that has been partially performed. For instance, when the purchaser has paid part of the price, taken possession of the property, and made permanent improvements to it, the parties clearly cannot be returned to the positions they occupied before the contract was formed. Whether a court will enforce an oral contract pertaining to land due to partial performance is usually determined by the degree of injury that would otherwise result. The party seeking performance must have reasonably relied on the contract (and on the other party’s continuing agreement) and so changed her or his position that injustice can be avoided only by specific enforcement.”
Sorry, it’s partial performance that I don’t understand.
Best answer:
Answer by J P
I’m not sure what your question is. But the Statute of Frauds was intended to avoid unjust claims by requiring that certain contracts be written in order to be enforceable. In the example you’ve cited there are two reasons for recognizing partial performance as a defense. First, the fact that a purchaser took possession of the property and went to considerable expense to erect permanent improvements tends to show that there was, indeed, a contract. It’s not likely that someone would bear such an expense without the expectation that they had acquired some interest in the property, or had a contract which would allow them to acquire an interest in the property. The fact that the party allegedly selling the property allowed them to erect such improvements, without protest, is further evidence that there was actually some agreement between them.
Secondly, the Statute of Frauds was intended to avoid injustices by precluding spurious claims. However, a mechanical reliance on such a doctrine could end up working an injustice in the case where there was actually an oral contract that both parties had relied on. If there was partial performance by taking possession of the property, and building substantial improvements, merely voiding the contract for lack of a written agreement would clearly prejudice the purchaser who would be out of pocket for the cost of the improvements. But enforcing the contract under such circumstances would allow both sides at least some benefit of their bargain, as the purchaser would get the land with the improvements, and the seller would be compensated.
Edit: Partial performance just means that some of what was supposed to happen under the contract actually did happen. In the case of a land sale, the seller “performs” the contract by giving possession of the land to the buyer. And the buyer’s performance is to pay for the land, either all at once or over some period of time. In the example you cited the seller performed, at least partially, by giving possession to the buyer and standing back while the buyer erected their improvements (i.e. built a house or whatever) and the buyer has partially performed by giving some of the purchase price to the seller. Again, the Court will look at this behavior and see that there must have been some kind of an agreement, or the parties would not have done what they did. Hope that helps. Good luck.
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