A buyer orally agrees to purchase a small parcel of land from a seller, pays the full price in cash, and takes possession, making substantial improvements to the land in reliance on the oral agreement. The seller later refuses to sign a deed transferring title. In this situation, a court may:
- ARescind the contract and order the buyer to vacate immediately
- BAutomatically void the transaction because no written contract exists
- CEnforce the oral agreement under the doctrine of partial performance
- DRequire the buyer to forfeit all improvements without compensation
Show answer & explanationAnswer & explanation
Correct answer: C. Enforce the oral agreement under the doctrine of partial performance
Although real estate sales contracts generally must be in writing under the Statute of Frauds, courts recognize the equitable doctrine of partial performance, allowing enforcement of an oral agreement when the buyer has paid the price, taken possession, and made improvements in reliance on the agreement, since these acts unambiguously refer to a sale.
Why the other options are wrong
- A. Rescission and eviction contradict the equitable remedy available through partial performance.
- B. Courts do not automatically void such agreements when partial performance evidence exists.
- D. Forfeiture without compensation would be inequitable and inconsistent with the doctrine's purpose.
Partial Performance Exception
An equitable doctrine allowing courts to enforce an otherwise unenforceable oral real estate contract when the buyer has taken possession, paid consideration, and made improvements in reliance on the agreement.
- Exception to the Statute of Frauds requirement of a writing
- Requires clear, unequivocal acts referable to the contract
- Common acts include possession, payment, and improvements
- Prevents unjust enrichment of the seller who reneges
Memory trick: 'Actions Speak Louder Than Ink'—possession plus payment plus improvements can replace a signature.