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Law School Case Brief

Ragosta v. Wilder - 156 Vt. 390, 592 A.2d 367 (1991)


A promise which the promisor should reasonably expect to induce action or forbearance on the part of the promisee or a third person and which does induce such action or forbearance is binding if injustice can be avoided only by enforcement of the promise. The remedy granted for breach may be limited as justice requires. This principle is distinct from part performance since the action or forbearance involved need not constitute part performance.


In 1987, plaintiffs mailed defendants a letter offering to purchase “The Fork Shop.” The letter included a check for $2000. By the letter dated September 28, 1987, defendant returned the $2000 check, and made a counter-offer. According to defendant’s counter-offer, defendant was willing to sell to the plaintiffs “The Fork Shop” for $80,000. The counter-offer stipulated that the plaintiffs should appear with the defendant at the Randolph National Bank with that sum. Plaintiffs called the defendant to tell the latter that the terms and conditions of the defendant’s offer were acceptable and that they would prepare to accept the offer. Defendant assured plaintiffs that there was no one else currently interested in purchasing the property. On October 6, plaintiffs informed defendant that they would not close the sale on October 8 as discussed previously but that they would come to Vermont on October 10. On October 8, defendant called plaintiffs and informed then that he was no longer willing to sell “The Fork Shop.” At the time, the defendant was aware that plaintiffs had processed their loan application and were prepared to close. Plaintiffs informed defendant that they would be at the Randolph National Bank at 10:00 a.m. on October 15 with the $88,000 purchase price, and in fact appeared. Defendant did not. Plaintiffs claimed that they incurred $7,499.23 in loan closing costs.

Plaintiffs sued for specific performance arguing that defendant had contracted to sell the property to them. They further alleged that defendant knew they would have to incur costs to obtain financing for the purchase but assured them that the sale would go through and that they relied on his assurances. The trial court concluded that defendant "made an offer in writing which could only be accepted by performance prior to the deadline." It concluded further that defendant could not revoke his offer on October 8th because plaintiffs, relying on the offer, had already begun performance and that defendant should be estopped from revoking the offer on a theory of equitable estoppel. It ordered defendant to convey to plaintiffs "The Fork Shop" for $88,000. Defendant appealed, arguing that the trial court improperly found that a binding contract existed and that it misapplied the doctrine of equitable estoppel.


Did a binding contract exist between the plaintiffs and defendant?




The Court reversed the trial court’s judgment, holding that the defendants' promise to keep the offer to sell open was not enforceable because it was not supported by consideration. His offer could be accepted only by the buyers' performance prior to the deadline. Thus, absent the operation of equitable estoppel, the defendant was free to revoke the offer to sell at any time up to the deadline. While the plaintiffs had incurred expenses in obtaining financing, equitable estoppel was inapplicable because there were no facts known to the defendant but unknown to the plaintiffs. The plaintiffs could not have acted on an understanding that the defendant would definitely convey the property to them.

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