(1) The law does not require that a contract for the sale of land shall in itself be wholly sufficient to identify the property. The writing is sufficient if it clearly reveals the intent of the parties with reference to the particular tract which is the subject matter of the sale and furnishes the means of its identification; or, as some cases hold, if it provides the "key" to the identification. The applicable principle being that that is certain which can be made certain.
(2) The courts are not justified in construing a contract plainly fixing a stipulated amount as damages accruing to one party by the violation of the contract by the other party and designating the same to be "liquidated damages", to mean other than what those words purport to mean upon their face, unless the sum fixed is shown to be so disproportionate to the amount of any such damage reasonably to be contemplated as to be oppressive. The intention of the parties in each case governs the construction. The provision must be fixed on the basis of compensation, otherwise it is construed as a penalty clause designed primarily to compel performance. To arrive at the intent of the parties, a court may consider whether the agreement contains various stipulations of various degrees of importance, the breaches of which would be easy to calculate in damages as to some and difficult as to others, in which event the sum specified would be construed as a penalty and not as liquidated damages, even though the parties have declared the contrary. Where the sum named in a contract to be paid in a breach is held to be a penalty and not liquidated damages, the amount of recovery is only the actual damages sustained. The courts tend to construe such stipulations, if doubtful, as punitive in nature.
Defendant Waterfield was the owner of an 825 acre farm in St. Clair County, Missouri. On June 18, 1951, he entered into a written agency agreement with Earl Allen, a real estate agent, for the sale of the above farm. The agreement bore the title of United Farm Agency "Property Listing Agreement" and included some seventy questions with blanks for answers. Among the questions and answers tending to identify the property were those stating, in effect, that the post office address of the property was Weaubleau, Missouri; acreage, 825; price, $19,000; located in St. Clair County, Missouri, on a black top road two miles from Highway 54, adjoining Weaubleau creek, and two miles from the Village of Weaubleau, Missouri; sixty-two miles from the City of Springfield; contained a four room frame house, painted yellow; roof, composition; front porch, 6 x 20; maple trees on level site; barn, 36 x 40, frame in fair condition, roofed with shingles; poultry house, size 10 x 20, and "Another six-room house - poor." The listing agreement further provided, among other things, for the payment of a commission of ten per cent to the agent for a sale to a purchaser procured by the latter on the terms stated.Plaintiffs, being interested in purchasing farm property in the vicinity, and seeing defendant's farm advertised, contacted Earl Allen, agent above mentioned, and entered into a written contract to purchase it. A few days after signing the agreement with the Plaintiffs, Defendant sold the farm to another party in breach of the contract. At trial, Defendant argued that written contract was not adequate under the Statute of Frauds because it did not contain sufficient detail about the land at issue. Plaintiffs challenged the “liquidated damages” provision of the contract, which limited breach damages to a liquidated sum of $1,900. The jury found that the there was a breach and that damages of $7,000 should be awarded. An appeal followed.
(1) If land is not thoroughly described in a contract, does it satisfy the statute of frauds requirements for sale of land?(2) Must a court strictly construe a “liquidated damages” provision that vastly undercuts the value of the consideration?
The description in the contract as explained and clarified by the evidence, is sufficient identification of the land intended to be sold to meet the requirements of the Statute of Frauds. The plaintiffs were entitled to their bargain. Defendant is in no position to deny that the market value of the farm was $26,000, for which he sold it, pending his contract with the plaintiffs. There is other evidence that the market value of the farm was $26,000. The plaintiffs in such case are entitled to damages in a sum equal to the difference between the unpaid part of their agreed purchase price and the market price of the land. "Under the rule generally prevailing in the United States, however, all these distinctions are unimportant, and the only rule defensible on principle, allowing the purchaser the difference between so much of the contract price as is unpaid and the market price of the land, is applied in every case where the vendor breaks his contract without legal excuse". Plaintiffs paid $1,900 which would leave $17,100 unpaid on the agreed purchase price. There was substantial evidence that the market value was $26,000. On that basis, the difference between the unpaid part of the purchase price and the actual value was $8,900. The verdict was for $7,000, well within the proper measure of damages.