Daily Development for Wednesday, September 29, 1999

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

STATE OF FRAUDS; DESCRIPTION OF PROPERTY: The failure to establish a specific legal description of property to be conveyed until the time for performance of the conveyance contract does not render the contract unenforceable for failure to satisfy the Statute of Frauds where the contract describes the larger parcel from which the land to be conveyed is to be selected at the time for performance and where there is external evidence of the parties intent at the time of contracting as to the general location of the property to be conveyed.

C470 Joint Venture v. Trizec Colorado, Inc., 176 F.3d 1289 (10th Cir. 1999).

The parties entered into a Covenants Agreement providing that Vendor would, from time to time and at the Vendee's request, convey and/or dedicate from a particularly described parcel of land, such easements, rightsofway or other accessways as necessary or required for the construction and operation of an interchange with a nearby highway.  The amount of land could not exceed five acres. It is not clear that any specific consideration was paid for this agreement, as it appeared to be part of a larger contract. Vendee had pledged to the Highway Division that it would provide this land.

At the time the parties entered the Covenants Agreement, they knew the planned route of the highway and a street that it would cross already existed. Vendee later requested that Vendor's successor in interest perform the covenant by conveying a rightof way to the county and provided Vendor's successor with a metes and bounds description of the property to be conveyed.  Vendor's successor sought to have the covenant declared unenforceable under Colorado law for failure to describe the property with adequate specificity and Vendee counterclaimed for specific performance.

The court held that the intention of the contracting parties could be determined with reasonable certainty from the language of the instrument. The Vendee had the authority to designate specified properties within a relatively narrow range. Therefore, Colorado's Statute of Frauds had been satisfied.

Comment: It is hard to argue with the result. The area within which the designations were to be made was relatively narrowly circumscribed. In effect, the entire area was held in "limbo" until the designations were met, but the overall area was not significantly larger than that to be conveyed. Further, the agreement seems to be a reasonable approach to address a difficult problem.

Finally, the other side made the mistake of asking to annul the agreement. This wasn't going to work. There might have been a chance that the agreement was not specific enough to support specific performance, but the court is not going to throw out a bargained for commercial agreement at this level of specificity just because the exact lot line are not, and could not, be identified in advance.

STATE OF FRAUDS; PARTIES: The intent to benefit a third party must be apparent from the terms of a contract for the conveyance of land, however, the third party beneficiary need not sign or be named in the contract.

C470 Joint Venture v. Trizec Colorado, Inc., 176 F.3d 1289 (10th Cir. 1999), described more fully under the heading: "Statute of Frauds; Description of Property."

The holder of the right to have the property transferred for highway purposes was not in a position to designate the property. Only the Highway Division could do that. It would have been wise for the drafter to provide either specifically that the Highway Division identifies the property or to establish some mechanism whereby the promissee, having been notified by the Highway Division, passes the information along. But even without such provisions, the purposes of the parties were clear and the deal deserved enforcement.

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 16, 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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