Also known as: part performance · partially performed
Written by attorneys · grounded in primary & secondary sources — see below
A basis for restitution allowing a party who has conferred benefits through part performance of an avoided contract to recover the value of those benefits from the other party. The doctrine also supplies an exception to the statute of frauds when the conduct unequivocally refers to the alleged agreement and prevents injustice.
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Perry Pratt, an infant, bought a used truck from Paragon Construction under an oral agreement. After paying half the price and driving the truck for two months, Perry disaffirmed on grounds of infancy and returned the vehicle. Paragon must restore the value of the payments received because Perry conferred that benefit through part performance of the now-avoided contract.
Pablo Perez signed an employment agreement with Pulse Media containing an illegal non-compete clause. After working for six months and receiving salary, Pablo challenged the clause. The court severed the illegal term and enforced the remainder of the contract, allowing Pulse Media to retain the benefit of Pablo's partial performance rather than voiding the entire agreement.
Pedro Pacheco orally agreed to buy farmland from his brother Philip Powell. Pedro paid part of the purchase price and took exclusive possession, making permanent improvements with Philip's knowledge. When Philip later refused to convey, the court enforced the oral contract because Pedro's part performance satisfied the statute of frauds exception.
Priscilla Parks, a general contractor, relied on Peak Performance's subcontract bid when preparing its own prime bid. After winning the prime contract, Priscilla used the bid in part performance of the anticipated subcontract. When Peak Performance refused to perform, the court held Peak Performance bound by promissory estoppel arising from the partial performance induced by its bid.
Patrick Phan orally agreed to buy a house from Pinnacle Holdings. Patrick paid for new wiring and plumbing but never took possession or paid any purchase money. When Pinnacle refused to convey, the court refused to enforce the oral contract because the improvements alone did not constitute the unequivocal part performance required to satisfy the statute of frauds.
Priscilla Parks bought a lot from Paragon Construction under a recorded declaration containing building restrictions. After beginning construction that violated the restrictions, Priscilla sought to avoid them on the ground that the restrictions were not in her deed. The court held that the recorded declaration bound her because partial performance under the restrictions did not create an exception to the recorded servitude.
A party who avoids a contract on grounds such as lack of capacity, mistake, misrepresentation, duress, or undue influence may recover the value of any benefit conferred on the other party through part performance or reliance. The recovering party must generally return any benefit received. Uncertainties in measuring the benefit are resolved in favor of the claimant when the other party engaged in misconduct.
Supporting sources
…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…
…is of crucial importance in removing a contract from the stricture of the Statute of Frauds. The possession requirement of the "part performance
…law. [^maj-5]: Comments a and b to § 129, read (in part): “a. . . . This section restates what is widely known as the ‘part performance
…benefit or suffering undeserved detriment as a result of voiding the entire agreement — part
…(1) whether a party expressly reserved the right to be bound only when a written agreement is signed; (2) whether there was any
Courts recognize part performance as an exception when the buyer's conduct unequivocally indicates reliance on an oral contract and the seller would have prevented the steps had no contract existed. Typical acts include taking exclusive possession, making substantial permanent improvements with the seller's knowledge, and paying part of the purchase price.
Supporting sources
A contract for the sale of goods that fails the writing requirement is enforceable to the extent of goods for which payment has been made and accepted or which have been received and accepted. The seller who resells goods received in part performance must follow the rules governing resale by an aggrieved seller if it had notice of the buyer's breach.
Supporting sources
A party who has partially performed may obtain restitution of the value conferred, less harm caused by the breach, even though the contract is unenforceable against that party. The action for restitution is not regarded as an action upon the contract and therefore is not barred by the statute of frauds.
Supporting sources