Contract Analysis Essay Example

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 secured by a mortgage or deed of trust upon the property.

Analysis:It is not questionable that there existed mutual assent, between Pat and Dan at the time the oral contract was formed. Most contracts are valid despite the fact that they may be only oral. Dan was knowledgeable that Pat wanted to buy a home, which she was not financially qualified to purchase. Consequently, he offered to purchase the home and sell it to her, when she had the capital to do so. The statement of Don to Pat, “When you come up with the money, I will sell the home to you for $250,000, plus a fair commission to be determined”, and Pat’s search and identification of a suitable home, and Dan’s purchase supports each intent to be bound.

In this case, the next week, Pat moved into the house, begins living in it, and made substantial improvements. The improvement consisted of installing new carpets, window coverings, and a patio cover. The improvements, spanning a period of six (6) months, amounted to a cost of $8,000. With respect to a contract, Dan might argue that there was not a contract, or that the

contract was outside the Statue of Frauds. However, any arguments to nullify the Statue of Frauds are not likely to be successful. In most instances courts attempt to find evidence that this defense is not supportable. Performance is more relevant in this case.

A contract for the sale of real property will be enforceable if the buyer has taken possession and has made permanent improvements upon it. Of course, the extent of the improvements required for enforcement varies from jurisdiction to jurisdiction. For six (6) months Pat mailed checks to Dan, which questioned “What he considered to be a fair commission, so that the deal could be finalized”. Although, Dan failed to respond to the question, he cashed the check. The note on the check, and the question, memorialized the transaction.

Here because the Statue of frauds applies, the agreement had to be memorialized in writing or a suitable record made. The memorializing requires that the writing be signed by or on behalf of the party against whom enforcement is sought. It is likely that Pat’s signing of the check will provide evidence to the court that the contract between her and Dan did exist. Essentially, the document indicated that a contract had been made between the parties. In addition, it must state with reasonable certainty the essential terms of the unperformed promise. An agreement that falls within the statue of frauds must be signed by or on behalf of the party against whom enforcement is sought.

An agreement may consist of several writings or records and only one need to be signed if the circumstances clearly indicated that the various writings relate to the same transaction. Pat

went to Dan with a check for $275,000 to convey the property over to her which he refused and ordered Pat out. In this case, in each instance, Pat performed to each element of the contract between her and Dan.

Although, the initial agreement was made orally, she showed reliance upon the oral agreement by demonstrating reliance by taking possession and making improvements, as well as making payments, and attempting to make final payment to close the deal. Although, this may not entitle Pat to gain the full value of the contract, by granting her the home, the court may find that she should be restored to the point of when she first entered into the contract. Minimally, she would capture the money she has spent on monthly payment and improvements to the property.

Conclusion: It is likely that the courts will find Dan in breach of contract, and will award to Pat at a minimum the expenses she paid each month to Dan, and the improvements made to the home.