Daily Development for Tuesday, August 8, 2000

By: Patrick A. Randolph, Jr.
Professor of Law
UMKC School of Law
Of Counsel: Blackwell Sanders Peper Martin
Kansas City, Missouri
randolphp@umkc.edu

STATUTE OF FRAUDS; REQUIREMENT FOR LEGAL DESCRIPTION: A contract for the sale of real property that does not contain any legal description of the property violates the Statute Of Frauds.

Key Design Inc. v. Moser, 983 P.2d 653 (Wash. 1999).

After his prospective vendor sold the property to another, the prior prospective purchaser sued the vendor for breach of contract, sued the actual purchasers for tortious interference with contractual relations, and sought reformation of the purchase agreement. The reason for the reformation count was that, unfortunately, the plaintiff's purchase contract did not contain a legal description of the property. Instead, the contract described the property to be sold as: "Vince's Fitness Center 1711 Hewitt Street in the City of Everett, Snohomish County, Washington."

The Court upheld the rule that an agreement involving a sale or conveyance of platted real property must contain a correct legal description. This unusually strict rule has been the rule in Washington for some time:

"We do not care to recede from the rule adopted by us, which has been stated in a long line of decisions over a number of years, and known and followed by the members of the bar and title men. We do not apologize for the rule. We feel that it is fair and just to require people dealing with real estate to properly and adequately describe it, so that courts may not be compelled to resort to extrinsic evidence in order to find out what was in the minds of the contracting parties."

The plaintiff claimed that the defendant vendor, in the court proceedings, had effectively acknowledged the existence of the land sale agreement and that the parties understood the property to be sold, and that therefore the contract came out of the Statute of Frauds under the "judicial admissions" exception. The court acknowledged that, in some jurisdicitions, the "judicial admissions doctrine" allows courts to enforce oral agreements involving title to real estate as long as the party against whom enforcement is sought has admitted in court or during discovery that an oral agreement existed.

But the court here held, with three dissenters, that Washington would not adopt the judicial admissions exception.

Comment 1: So that all will be satisfied that the editor really was engaged in professional activities during his recent jaunt to England, the editor can report that the practice described above of "selling out" a property to a third party when it already has been subject to contract with a first party, is known in England as "gazzumping." The British usually sign rather general binders before proceeding to a more formal contract, and apparently the "gazzumping" often occurs in the interval between the two agreements. It is nevertheless actionable.

Comment 2: Not every American jurisdiction is going to be so rigid on the requirement for a precise legal description in order for a land sale agreement to be binding. But isn't it a good idea? Certainly, if we had the rule, then the buyers (or their agents) would demand legal descriptions and the sellers (or their agents) would have these descriptions ready. There are many instances of sales contracts based upon street addresses or similar vague descriptions where it later appears that the buyer and seller had quite different parcels in mind.

The question, fundamentally, is whether parties engaged in commerce in real estate should be expected resort to expert advisors in order to comply with fundamental formalities to insure clear title and avoid arguments. The editor says: why not? Had the first buyers used expert advisors here, they may have lost the property, but they'd have had a juicy malpractice claim. As it was, the first buyers were themselves experienced real estate dealers, and should have known better. They even used a form that required the use of the legal description, and left that part of the form blank.

Readers are urged to respond, comment, and argue with the daily development or the editor's comments about it.

Items in the Daily Development section generally are extracted from the Quarterly Report on Developments in Real Estate Law, published by the ABA Section on Real Property, Probate & Trust Law. Subscriptions to the Quarterly Report are available to Section members only. The cost is nominal. For the last six years, these Reports have been collated, updated, indexed and bound into an Annual Survey of Developments in Real Estate Law, volumes 1‑6, published by the ABA Press. The Annual Survey volumes are available for sale to the public. For the Report or the Survey, contact Maria Tabor at the ABA. (312) 988 5590 or mtabor@staff.abanet.org

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