Also known as: part performance · partial performance exception · part-performance exception · statute of frauds part performance · part performance doctrine
Written by attorneys — see sources below.
An exception to the statute of frauds that permits recovery in restitution for benefits conferred by part performance when a contract has been avoided on grounds such as mistake or misrepresentation. The claim is not treated as an action upon the contract. The rule applies after avoidance on any statutory ground and allows recovery of the reasonable value of improvements or other benefits conferred.
Priya Prasad paid two installments on an oral land contract with Parker Phillips before discovering a mutual mistake about the parcel's boundaries. She avoided the contract and sought return of the payments. The court awarded restitution because her payments constituted part performance that conferred a measurable benefit on Phillips.
Perry Pratt relied on a paving subcontractor's oral bid when submitting his own prime contract proposal. After winning the job he ordered the subcontractor to begin work. The subcontractor attempted to withdraw. The court enforced the bid because Pratt's preparation and award of the prime contract constituted part performance that made the offer irrevocable.
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.
View casePedro Pacheco purchased a lot in a subdivision and began constructing a home in reliance on an oral promise that all lots would be subject to uniform building restrictions. Later buyers sought to ignore the restrictions. The court applied the part performance exception and enforced the restrictions against the later purchasers.
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.
View casePiper Patel sold her business and moved in to care for an elderly neighbor after an oral promise that the house would pass to her at death. She provided daily care for five months until the neighbor died. The court refused to enforce the promise because the caregiving did not unequivocally refer to a contract for the land.
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.
View casePaula Pierce occupied and improved family farmland for years after an oral agreement with her siblings that she would receive title upon paying off the mortgage. When the siblings later denied the agreement she sued for specific performance. The court enforced the oral promise because her long-term possession and mortgage payments constituted sufficient part performance.
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.
View casePatriot Insurance tendered a deposit check noting the purchase price and property address after an oral agreement to buy land from Prosperity Investments. The buyer then incurred survey and attorney fees. When the seller refused to convey the court ordered specific performance because the check and subsequent expenditures supplied part performance that satisfied the statute of frauds.
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.
View caseMany courts limit the exception to contracts for the sale of land. Some jurisdictions refuse to extend it to other statute-of-frauds categories such as contracts not performable within one year.
The performance must be unequivocally referable to the alleged oral contract. Acts that are equally consistent with some other explanation will not suffice.
Some courts restrict the exception to equitable claims for specific performance. Others permit damages when the part performance also satisfies the evidentiary function of the statute.
Payment by itself is usually insufficient unless accompanied by possession or improvements that clearly refer to the contract.
…of the requested performance is given, the offeror will not revoke his offer, and that if tender is made it will be accepted. Part performance or tender may thus furnish consideration for the subsidiary promise. Moreover, merely acting in justifiable reliance on an offer may in some cases serve as sufficient reason for making a…