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Law School Case Brief

Sullivan v. Porter - 2004 ME 134, 861 A.2d 625

Rule:

Absent extraordinary circumstances, a contract for the sale of land must be in writing to be enforceable. Me. Rev. Stat. Ann. tit. 33, § 51(4) (1999). A transfer of real property without a written instrument may be enforced only if the party seeking to enforce the contract proves by clear and convincing evidence that an oral contract exists and that an exception to the statute of frauds applies. One exception to the statute of frauds is found in the part performance doctrine. The part performance doctrine requires the party seeking to enforce the contract to establish both that she acted in partial performance of her contractual duties and that the other party made misrepresentations that induced that partial performance. Thus, to remove a contract from the operation of the statute of frauds pursuant to that doctrine, the party seeking to enforce the contract must establish by clear and convincing evidence: (1) that the parties did enter into a contract; (2) that the party seeking to enforce the contract partially performed the contract; and (3) that the performance was induced by the other party's misrepresentations, which may include acquiescence or silence.

Facts:

Merval and Susan Porter offered to sell their farm for $350,000 to Joan Sullivan and David Andrews. Merval offered to owner-finance the sale at an interest rate between 5% to 7% for 20 to 30 years and asked for a down payment of $20,000. Sullivan and Andrews orally accepted the offer. Merval assured them that his attorney will start the paperwork. The Porters accepted $3,000 from Sullivan and Andrews as down payment. Sullivan and Andrews took possession of the property and began extensive renovations of the farmhouse and started their new business – all with the Porters’ knowledge. When asked about the necessary paperwork, Merval always responded that he was too busy to contact his attorney.

After a few months, Sullivan forwarded a copy of an appraisal of the Porters’ property at $250,000 but informed the Porters that they intended to stick to the $350,000 price agreed upon. Merval replied offering the property for $450,000. Sullivan and Andrews sued the Porters for specific performance alleging that the Porters are estopped from denying the contract previously agreed upon. The Porters asserted the statute of frauds as an affirmative defense.

The jury found that the parties had entered into a contract of sale. The trial court concluded that the parties indeed agreed to a $350,000 purchase price and had set the terms of payment. The trial court ordered the Porters to execute the contract of sale.

Issue:

Was there a contract of sale between the Porters and Sullivan and Andrews for the Porters’ farm?

Answer:

Yes.

Conclusion:

The Court ruled that there was a meeting of the minds between the parties and that the terms of agreement were clear. The essential elements of the contract were: (1) the property to be sold as "Lakewood Farm"; (2) the parties to the transaction, the Porters as the sellers and Sullivan and Andrews as the buyers; (3) the purchase price of $350,000; (4) the $20,000 down payment; and (5) the arrangement for owner financing. The parties also established within a finite range the term of the mortgage (20 to 30 years) and the interest rate (5% to 7%).

According to the Court, the contract was already partially performed. Sullivan and Andrews took possession of the property and made extensive repairs. The Porters also accepted the down payment offered to them. The Court also found that the Porters induced Sullivan and Andrew’s partial performance by misrepresentation as they remained silent when the property was being renovated and made assurances regarding the paperwork of the property.

The Court affirmed the trial court’s decision.

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