A buyer takes possession of a California property and pays $60,000 toward the purchase price under an oral agreement with the seller. When the seller refuses to complete the sale, the buyer sues to enforce the agreement. The seller raises the Statute of Frauds as a defense. How would a California court MOST likely rule?

Correct Answer

A) The court may enforce the agreement if the buyer's payment and possession sufficiently establish part performance

California Civil Code §1624 requires real property contracts to be in writing, but courts recognize the doctrine of part performance as an equitable exception. When a party has paid toward the purchase price and taken possession in reliance on an oral agreement, strict application of the Statute of Frauds would itself produce fraud. California courts, following the reasoning in Monarco v. Lo Greco (1950) 35 Cal.2d 621, may enforce such agreements where the acts of performance are clearly referable to the oral contract and would cause unjust enrichment if the defense were allowed.