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Law School Case Brief

Gmh Assocs. v. Prudential Realty Grp. - 2000 PA Super 59, 752 A.2d 889


The essential terms that must be identified and agreed to in order to form a valid contract for the sale of real estate are the naming of the specific parties, property and consideration or purchase price. Where the existence of an informal contract is alleged, it is essential to the enforcement of such an informal contract that the minds of the parties should meet on all the terms as well as the subject matter. If anything is left open for future negotiation, the informal paper cannot form the basis of a binding contract.


Although the parties signed a letter of interest to sell commercial real estate, they continued negotiating price, tenant improvement, and commissions. Appellee sent another letter with new terms, however, appellants rejected appellee's bid and sold the property to another buyer. Appellee sued, alleging breach of contract and fraudulent misrepresentation. The trial court awarded appellee damages, concluding an enforceable oral contract had existed. Appellants challenged the judgment.


Did an enforceable oral contract exist for the sale of certain property?




Upon appeal, the Court reversed because the trial court improperly concluded an oral contract existed. According to the Court, it was clear from both letters of interest that the parties always intended that any binding transaction to convey the property would be accomplished by a written contract. Thus, there was no breach of contract when appellants failed to sell the property to appellee. The Court averred that appellants were under no legal duty to reveal its negotiations with another buyer, thus, there was no fraud, and appellants were entitled to judgment notwithstanding the verdict.

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