Wagers v. Associated Mortgage Investors, 19 Wash. App. 788 (1978). (Casebook pg.

420) Facts: (Wagers) entered into negotiations over the phone w/ (AMI) to purchase 104 real estate lots. was having a problem w/ one of the lots, constituting 7 of the 104 owners. o s attorney WROTE s attorney a letter explaining that their agreement was subject to prior approval by its trustees and subject to its ability to arrange for delivery of clear title. s attorney WROTE back, mentioning the sale several times, and noting that the was securing the necessary funds. o s attorney also noted that if there was a problem w/ the 7 units, the cost would be reduced from $270,000 by $18,173.05 (the cost of 104 lots 7 lots). s attorney quickly WROTE back, explaining that there was no sale yet, and that the agreements had not been finalized. o indicated that if the was attempting to secure the money, he was doing so at his own risk, and that has accepted no offer at this point. The sale is still CONTINGENT on the approval of the trustees and the approval of each of the owners of the 7 units w/ issues. History: then sued for SPECIFIC PERFORMANCE, or, in the event that specific performance doesnt work, for DAMAGES for breach of . demurred, and the TC GRANTED s motion for summary judgment on specific performance (and I assume denied damages, but it doesnt say in the casebook). APPEALS Issue: 1) Whether s unilaterally executed earnest money agreement, together with the letters exchanged between the parties respective3 attorneys, constitute a sufficient writing of a sale of land to satisfy the statute of frauds? 2) Whether s arrangement of financing for development of the subject of the sale constituted sufficient part performance to make the sale an EXCEPTION to the statute of frauds? Holding/Rule: 1) NO. Where an earnest money agreement is unilaterally executed by prospective purchaser, together with letters exchanged between purchaser's and vendor's attorneys, and the letters do not establish an agreement on essential contract terms, the documents DO NOT constitute a writing sufficient to satisfy the statute of frauds. 2) NO. The fact that prospective purchaser arranged financing DOES NOT constitute sufficient part performance to make the transaction an exception to the statute of frauds.

Reasoning: Regarding SPECIFIC PERFORMANCE: o The writings and oral agreements in this case clearly indicate that the s offer had not yet been accepted by the , and the letters of correspondence clearly show that still needed further approval. s letter indicating the sale was a clear attempt to make a unilateral where there was none, and furthermore, the change in sale price to account for the 7 units that might not be included was never agreed upon this was an attempt by s attorney to cover any losses that he might occur, and it doesnt work. Regarding PART PERFORMANCE: o One of the requirements of the doctrine of part performance as an exception to the statute of frauds is that the acts relied on as constituting part performance must unmistakably point to the existence of the claimed agreement; if they may be accounted for by some other hypothesis, they are not sufficient. s attempts to secure money to pay for the transaction were clearly done so at his own expense as indicated by s attorney, and cannot constitute part performance. o There are THREE ELEMENTS involved in determining part performance, the presence of all three being the strongest case: 1) Delivery and assumption of the actual and exclusive possession of land. 2) Payment or tender of the consideration, whether in money, or other property, or services. 3) The making of permanent, substantial, and valuable improvements, referable to the . in this instance has NONE OF THE ELEMENTS to satisfy part performance The court notes, however, that a case could be made for having just 2 of them, and potentially as little as proving 1 element may satisfy (although it is highly unlikely). Decision: TC decision AFFIRMED, no specific performance, no part performance on s part. Class Notes: Restatement (Second) of Contracts 129 Action in Reliance, Specific Performance o This is specifically for TRANSFERS OF REAL PROPERTY. o It doesnt deal with the 1 year provision, it doesnt deal with anything else. o They cant sue for damages of the to be enforced they can only seek specific performance. In this case, there is NO WRITING that was signed by a party to be charged. o There were oral agreements, but nothing where the wrote and signed their acceptance.

Notes: (before this case starting on pg. 419) IV. MITIGATING DOCTRINES AND EXCEPTIONS A. Restitution o Now were going to ask the 3rd question: If it doesnt satisfy the statute, then what? Problem 100 If an employee gets hired by a company for 2 years through an oral agreement, works 2 months and then gets wrongfully terminated because they thought she was stealing, can she recover the 2 months of pay that she has not received? o YES. She would be able to seek damages even though the violates the statute of frauds (no writing, over 1 year), and it would be in RESTITUTION. o She would either be able to seek the compensation she was promised (say $8.00/hour if they told her that is what she would be making) or she would be able to seek a REASONABLE wage in the absence of any specificity as to what she would be earning per day/hour b/c it would be the value of the services rendered to the . B. Part Performance go back up and read this case. RESTATEMENT (SECOND) OF CONTRACTS 129 Action in Reliance, Specific Performance (pg. 188) Comment (d): The promisee has to act in reasonable reliance on the promise, before the promisor has repudiated it, and the action must be such that the remedy of restitution is INADEQUATE. If these requirements are met, neither taking of possession nor payment of money nor the making of improvements is essential. Notes: The payment element doesnt typically satisfy the Statute UNLESS it is in FULL. Part performance is not preparation to perform. Keep in mind: o The 1 year provision is still applicable, so part performance doesnt matter if the will still take more than 1 year. o The MARRIAGE provision is still applicable. Problem 101 puts down a deposit of $300 by CHECK on a 1978 Corvette pace car edition after an ORAL agreement w/ s sales associate. comes back to p/u the car, but the says there is no b/c there was no writing. Instead, says that he can give him a bumper worth $300. Who wins, and can the check itself satisfy the writing requirement? Look at UCC 2-201(3)(c) o A payment has been made, so it constitutes as part performance and a DOWN PAYMENT will establish a quantity of 1. If this were a for 2 cars and the down payment was made, it would still only be for a quantity of 1.

BUT if the check says down payment for 2 cars, it would be sufficient to prove the quantity of 2, and the would have to give 2 cars. o The would win b/c part performance includes paying by money or check, and giving the just a bumper wouldnt satisfy even though NOTE 2 after this section states that WHERE THE COURT CAN MAKE A JUST APPORTIONMENT, the can be forced to deliver a portion of the goods. This isnt the case here b/c the was for an entire car, not just the bumper, and the court cannot justly apportion the sale of a car. o The CHECK ALONE is probably not enough to satisfy the writing requirement of the Statute b/c it does not have any of the details of the on it only having part of the price Additionally, the s endorsement of the check just means that he is accepting that check, not that he is accepting the agreement to sell an entire car (with the check alone and no oral communications). BUT if the check had some form of NOTATION regarding the (saying something about the on the memo line), then it WOULD BE ENFORCEABLE. C. Admissions Problem 102 orally agrees w/ to sell her house to the , but right before they sign the written , backs down. sues, and in COURT, ADMITS that the written correctly reflects all of the terms of their oral agreement. Is she screwed? o YUP! UCC 2-201(3)(b) says that if there has been a COURT RELATED admission of a valid , the Statute CANNOT be used as a valid defense. All that is required is that the party admit facts that relate to the formation of a , not saying there was a or something to that effect. Problem 103 , an artist, enters into an oral agreement w/ , a buyer, to sell his art at a rate of 1 painting per year for $10,000 per painting for 5 years. The time comes to sell his first painting, and the wont do it. o On the stand, admits the . The problem is this is a sale of GOODS, so the admission could destroy any statute of frauds defense, but at the same time the Common Law doesnt allow the b/c it is past 1 year. What outcome? The *NEW* UCC 2-201 specifically provides that the 1 year rule DOESNT apply in s for the sale of goods and the admission destroys the statute of frauds defense and the will be able to seek specific performance (b/c they are one-of-a-kind pieces of art) and at least have the one painting sold to him (b/c the court may look at it as 5 separate s, one of which could be performed w/in a year).

BUT... some jurisdictions would look at only the common law, arguing that the Statute of Frauds does apply, and the OLD UCC 2-201, and STILL allow the b/c the ADMITTED (201(3)(b)) o would have to give up the 1 painting (looking at it as 5 separate s), and would be able to buy 1 (not all 5).