Carlos verbally agrees to sell his Boston condominium to Diana for $650,000. They shake hands and Diana immediately pays a $10,000 good-faith deposit to Carlos directly, which he accepts. No written contract is ever signed. Two weeks later, Carlos refuses to proceed with the sale and returns the $10,000 deposit. Diana sues for specific performance. Under Massachusetts law, which of the following best describes the likely outcome?
Correct Answer
A) Diana will likely not prevail because under MGL Chapter 259, the contract for sale of real property must be in writing and signed to be enforceable, and returning the deposit eliminates unjust enrichment claims.
Under MGL Chapter 259, Section 1, a contract for the sale of real property must be in writing and signed by the party to be charged to be enforceable. Because no written contract was ever signed, the oral agreement between Carlos and Diana is unenforceable under the Massachusetts Statute of Frauds. Since Carlos returned the $10,000 deposit, Diana has no unjust enrichment claim either. Massachusetts courts generally do not apply the part-performance doctrine to override the Statute of Frauds for specific performance claims absent extraordinary equitable circumstances, and the mere payment and return of a deposit is insufficient to establish such circumstances.
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Related Topics & Key Terms
Key Terms:
Related Concepts
A purchase agreement is a legally binding contract between a buyer and seller that outlines the terms and conditions for the sale of real property. It is also commonly called a sales contract, purchase and sale agreement, or earnest money agreement.
Specific performance is a court-ordered remedy that compels the breaching party to fulfill their obligations under the contract rather than simply paying monetary damages. It is an equitable remedy used when monetary damages would be inadequate.
The Statute of Frauds is a legal requirement that certain types of contracts must be in writing and signed to be enforceable. In real estate, all contracts for the sale of land or interests in land must be in writing.
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