Gee v. Neiberg

501 S.W.2d 542 (Mo. Ct. App. 1973)

 

RULE:

An agreement to terminate or release one from a contract is a new contract which must be supported by a new consideration. 

FACTS:

The parties entered into a one-year written lease. The tenants paid one month's rent as a security deposit that was to be returned to them at the expiration of the lease. After paying 11 months' rent, the tenants moved out and sought the return of the security deposit. They claimed that the 12th month of the lease had been mutually terminated by oral agreement. The landlord refused to return the security deposit. In the tenants' action, the trial court found in their favor. On appeal, the court affirmed. 

ISSUE:

Was the oral agreement in this case sufficient to terminate a written lease?

ANSWER:

Yes.

CONCLUSION:

This court noted that according to Modern English theory and many American decisions, it has been held that an executory oral agreement of rescission is sufficient, provided there is consideration, to terminate a written agreement within the statute of frauds. In this case, the purpose of the oral agreement was not to add to or change the nature of the parties' obligations under the old lease, but rather to bring it to an end so as to release the parties and abrogate the old lease entirely. Therefore, since the lease agreement was executory and the unexpired term was less than that required by the statute of frauds to be in writing, the court held that the lease was terminated by the subsequent executory oral agreement.  Thus, the court affirmed the lower court's judgment in favor of the tenants.

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