Also known as:part-performance · parts performance · doctrine of part performance
Written by attorneys — see sources below.
An equitable doctrine that permits enforcement of an oral contract or restitution for benefits conferred when a party has rendered part performance in reliance on the agreement. The doctrine satisfies the evidentiary purpose of the statute of frauds or creates an option contract that renders a unilateral offer irrevocable while performance continues. It applies when the acts are unequivocally referable to the contract and the performing party cannot be restored to the status quo without injustice.
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Uniform Acts
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Common Examples
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Restitution After Avoidance
Phuong Pham avoided an oral land contract on grounds of misrepresentation after paying two installments and taking preliminary steps toward development. The court awarded restitution of the payments because the part performance conferred a measurable benefit on the seller that could not be retained without unjust enrichment. Pavel Petrov, the seller, was required to return the funds even though the contract itself remained unenforceable.
Possession And Improvements
Peter Park orally agreed to buy a parcel from Paige Porter for a fixed price. Park took possession, built a fence, and planted crops in reliance on the promise. The court enforced the oral contract under the part performance doctrine because the acts were unequivocally referable to the sale and Porter could not restore the status quo without injustice.
Mrs. Gladys Green owned a lot known as Lot S in the Manomet section of Plymouth. In July 1980 she advertised the lot for sale. On July 11 and 12 of that year, Mr. and Mrs. Hickey met with Mrs. Green to discuss purchasing the lot and reached an oral agreement to buy it for $15,000.
On July 12 the Hickeys gave Mrs. Green a deposit check for $500. The check was marked on the back with the notation "Deposit on Lot . . . Massasoit Ave. Manomet . . . Subject to Variance from Town of Plymouth," but the payee line was left blank. Mrs. Green held the check without filling in the payee name, cashing it, or endorsing it. By July 16 it was determined that no zoning variance would be required.
Relying on the arrangements with Mrs. Green, the Hickeys advertised their house on Sachem Road for sale in newspapers on three days in July 1980. They agreed to sell their house to a purchaser and accepted a $500 deposit check from that purchaser, which they deposited in their own account. On July 24 Mrs. Green informed the Hickeys that she no longer intended to sell the lot to them and had decided to sell it to another buyer for $16,000. The Hickeys offered Mrs. Green $16,000 for Lot S, but she refused the offer.
The Hickeys filed a complaint in the Superior Court seeking specific performance of the agreement with Mrs. Green. The case was presented on a stipulation of facts with attached documents, which the Superior Court judge adopted as findings. The trial judge granted specific performance to the Hickeys. Mrs. Green appealed the decision to the Appeals Court of Massachusetts.
Pierce Patterson offered a bonus to the first subcontractor who completed paving work on a specified site. Drennan began the paving in reliance on the offer. The court held that the part performance created an option contract that prevented Patterson from revoking while Drennan continued toward completion.
Drennan v. Star Paving Co.51 Cal. 2d 409, 333 P.2d 757 (1958)
On July 28, 1955, plaintiff, a licensed general contractor, was preparing a bid on the Monte Vista School Job in the Lancaster school district with bids due before 8 p.m. It was customary in that area for general contractors to receive the bids of subcontractors by telephone on the day set for bidding and to rely on them in computing their own bids.
Plaintiff's secretary received between 50 and 75 subcontractors’ bids by telephone that day and recorded them on special forms for plaintiff to post on a master cost sheet.
Late in the afternoon, defendant's estimator telephoned and submitted a bid of $7,131.60 for the paving work according to the plans and specifications. Plaintiff listened to the bid over an extension telephone and posted it on the master sheet, where it was the lowest bid for the paving. Plaintiff computed his own bid of $317,385 accordingly, submitted it naming defendant as the subcontractor for the paving, and was awarded the contract when his bid proved the lowest.
The next morning, plaintiff stopped at defendant's office and was told by defendant's construction engineer that they had made a mistake in their bid and could not do the work for the price bid. Plaintiff informed the engineer that he expected defendant to carry through with the original bid since he had used it in compiling his bid. Defendant subsequently refused to perform the paving work for less than $15,000.
Plaintiff obtained figures from other subcontractors. After several months, he engaged L & H Paving Company to do the work for $10,948.60. The trial court found that defendant made a definite offer to do the paving for $7,131.60 and that plaintiff relied on the bid in computing his own bid and naming defendant as the subcontractor. It entered judgment for plaintiff in the amount of $3,817, the difference between defendant's bid and the cost of the paving to plaintiff, and defendant appealed from that judgment.
Acts Not Referable
Phoebe Park moved into a house and performed minor repairs after an oral promise that the property would pass to her on the owner's death. The court refused specific performance because the acts could be explained without reference to an ownership agreement and therefore did not constitute sufficient part performance.
Burns v. McCormick135 N.E. 273 (N.Y. 1922)
In June 1918, James A. Halsey, an old man and a widower, was living without family or housekeeper in his house in Hornell, New York. He told the plaintiffs that if they gave up their home and business in Andover, New York, and boarded and cared for him during his life, the house and lot with its furniture and equipment would be theirs upon his death.
The plaintiffs did as he asked, selling out an interest in a little draying business in Andover and boarding and tending him until he died about five months after their coming. Neither deed nor will nor memorandum subscribed by the promisor exists to authenticate the promise, and the plaintiffs ask specific performance.
During Halsey's lifetime the plaintiffs had no possession of the property and did not occupy it as owners. Halsey retained possession, and the plaintiffs lived with him merely as his servants or guests who could be asked to leave at any time. The plaintiffs paid food bills and performed housekeeping work while Halsey paid the taxes and upkeep costs. There were ties of kinship between one of the plaintiffs and Halsey.
Progressive Healthcare conveyed one tract to Premier Manufacturing under an oral agreement to exchange parcels. Premier took possession of the second tract and made improvements. The court enforced the exchange because Premier's possession and improvements supplied the part performance needed to remove the oral contract from the statute of frauds.
Smith v. Smith466 So. 2d 922, 925 (Ala. 1985)
Roy Smith and his twin brother Ray Smith became involved in a dispute over land ownership that originated with acquisitions in the 1940s and 1950s. Ray Smith purchased an 80-acre rectangular tract in 1943. In 1950, Ray, Roy, and their mother obtained joint title to a 42-acre tract positioned cattycornered southwest of Ray's 80 acres. In 1960, Ray and their mother transferred their interests in the 42-acre tract to Roy. This allowed Roy to mortgage the property and acquire an additional 80-acre tract north of the 42 acres and west of Ray's original holding.
The brothers differed on the purpose behind the 1960 conveyance of the 42-acre tract. Ray maintained that it served only to help Roy finance the northern 80-acre purchase, with the understanding that Roy would later transfer half of the 42 acres back to Ray. Roy asserted that the transfer formed part of their parents' plan for the twins to achieve equal land ownership through mutual conveyances of half their respective parcels.
On December 30, 1963, Roy conveyed about 20 acres from the 42-acre tract to Ray. Roy alleged that this transfer occurred under an oral agreement whereby Ray would convey the northern half of his 80-acre tract to Roy in exchange. Ray denied entering into any such agreement. Seventeen years later, in May 1981, Roy initiated a lawsuit against Ray seeking specific performance of the alleged oral contract.
The case proceeded to a bench trial without a jury, resulting in a judgment for Roy. Ray then appealed to the Supreme Court of Alabama, raising three grounds of error related to the enforcement of the oral contract.
Servitude Reliance
Precision Tools relied on an oral promise of an easement across neighboring land by installing utilities and grading a road. The court recognized the easement under the part performance doctrine because the improvements were made in direct reliance on the oral grant and could not be undone without substantial loss.
Riley v. Bear Creek Planning Committee551 P.2d 1213 (Cal. 1976)
In February 1964, Alpine Slopes Development Company conveyed Lot 101 of Alpine Meadows Estates Subdivision No. 3 in Placer County to Ernest H. and Jewel Riley by grant deed recorded on March 13, 1964. The deed contained no restrictions upon the use of the plaintiffs’ property nor any reference to any instrument purporting to impose restrictions upon Lot 101. At the time of the conveyance there was no document of record purporting to restrict the use of Lot 101.
Nine months later, on November 25, 1964, the grantor recorded a declaration of covenants, conditions, restrictions and reservations on lots 72 through 116 of the subdivision. The declaration recited that the grantor had established a general plan for the improvement and development of the property and set forth 26 numbered paragraphs of restrictions, covenants and conditions, including paragraph 6, which required submission of plans and specifications to the Bear Creek Planning Committee and its approval before any dwelling, garage, building, fence, wall or other structure or excavation could be commenced or maintained.
At a time not established by the record the Rileys constructed a snow tunnel on their lot. On January 12, 1972, the committee recorded a notice of violation of covenants, conditions and restrictions that referred specifically to Lot 101 and the declaration recorded November 25, 1964, and recited the probable violation of paragraph 6 in that a covered walkway had been constructed without prior compliance.
The Rileys filed a complaint to quiet title and for damages for slander of title. The planning committee and some of its members cross-complained for declaratory relief. The trial court entered judgment quieting title in the Rileys against all claims of defendants and ruling for the Rileys on the cross-complaint.
The Court of Appeal, Third Appellate District, affirmed the judgment. The California Supreme Court granted a hearing for the purpose of giving further consideration to the issues raised.
4 common questions
Students Frequently Ask...
What acts constitute sufficient part performance to enforce an oral land contract?
Courts require acts that are unequivocally referable to the contract, such as taking possession and making permanent improvements that cannot be explained without reference to an ownership agreement. Mere payment of money or minor repairs usually falls short because those acts can be consistent with a lease or license.
Supporting sources
Does part performance create an option contract in unilateral offers?
Yes. When an offer invites acceptance solely by performance, the offeree's beginning the invited performance creates an option that prevents revocation while the offeree continues in accordance with the offer's terms. The offeror's duty remains conditional on completion or tender of the full performance.
Supporting sources
Can a party recover restitution for part performance after avoiding a contract?
A party who avoids a contract on grounds such as misrepresentation or lack of capacity may recover the reasonable value of any benefit conferred by part performance or reliance. The performing party must generally return any benefit received, but is entitled to compensation for improvements made before avoidance.
Supporting sources
Does part performance remove a contract from the one-year provision of the statute of frauds?
No. Part performance satisfies the statute only for land-sale contracts. Contracts that cannot be performed within one year remain unenforceable despite partial performance because the statute's purpose of preventing disputes over long-term oral promises is not satisfied by acts that do not uniquely evidence the agreement.
Supporting sources
doctrine
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Part performance
is not an accurate designation of such acts as taking possession and making improvements when the contract does not provide for such acts, but such acts…
performance
“unequivocally referable” to the…
ContractsDefenses to enforceability · Statute of fraudsUBEIntermediate