Sun Valley owned a little over 1.5 acres of an
undeveloped lot. Hoffman took him to court to constrain certain performances
that were in the agreement. While this was in district court, the judge decided
“while an oral understanding for the sale of the property existed, there was
nevertheless failure to adequately comply with the statue of frauds and thus
the agreement was unenforceable.” The district court determined that the oral
agreement for the sale of the property existed but it didn’t comply with the
statute of frauds making the agreement unenforceable. The district court also
determined that the equitable doctrines of part performance and estoppel did
not apply. Hoffman/Frey appealed to the SC and Sun Valley argued that the
parties never reached a mutual agreement on the terms of the transaction (no
Is there an enforceable contract to sell the
property of Sun Valley?Are the two documents, the letter and check, sufficient
to satisfy the statutory requirements?
Was there an oral agreement and is
there sufficient memorandum signed by the parties that evidences the agreement
so that the SoF is satisfied?
Yes and No. Yes, the parties did come to an oral
mutual agreement on the sale of the parties, however, the agreement did not
comply with the statute of frauds and the agreement is not enforceable.
The parties did have a mutual
agreement regarding the terms of the transaction (sale of land)
Check issued by purchaser and letter written by
purchaser was insufficient as memorandum to take verbal agreement out of
statute of frauds
Actions taken by purchasers were insufficient to
establish part performance to take contract out of statute of frauds
Principle of equitable estoppel is not
applicable to enforce oral contract
Opinion Reasoning: Justice Shepard
A contract requires that the parties
have a distinct understanding of what is agreed upon.
An agreement for the sale of real
property is invalid unless the agreement or some note or memorandum thereof be
in writing and subscribed by the party charged or his agent. Failure to comply
with the statute of frauds renders an oral agreement unenforceable both in an
action at law for damages and in a suit in equity for specific performance.
Idaho requires that both parties to
a bilateral contract sign the memorandum even though the majority of other
jurisdictions require that only the party against whom the enforcement is
sought is required to sign.
Sufficient part performance by a
purchaser of real property removes the contract from the operation of the
statute of frauds –
The most important acts which
constitute sufficient part performance are actual possession, permanent and
valuable improvements and these two combined.
Equitable estoppel requirements are
The parties negotiated for the
purchase price of the property and the price was approved by the executive
committee. They agreed on a price of
$90,000 for the property and it could be paid in cash or with 30% down, with
the remainder to be paid over five years with a 9 ¾% interest rate. The buyer
sent Sun Valley (seller) an email and check confirming these details but it also
contained additional terms. Sun Valley later deposited the check in it’s trust
account. Sun Valley prepared documents for the sale and loan and gave them to
Huffman/Frey but Sun Valley never executed them. These facts support that the
parties reached a mutual agreement on the sale of the property.
The lot sale agreement was never
signed by Sun Valley. For the oral agreement to be enforceable, there must
exist a sufficient memorandum signed by the parties evidencing that agreement.
The lot sale agreement was never
signed by Sun Valley. The only document signed by both parties is the $5,000
deposit check and it doesn’t reference Hoffman’s email/letter or the lot sale
Hoffman says they exercised
possessory right by having the land surveyed and by submitting a subdivision
plan to the City of SV- cost of securing subdivision approval is not
Opinion(s) Reasoning: Bakes, C.J., McFadden and Donaldson,
Opinion(s) Reasoning: Bistline
Bistline says Idaho law is outdated and it needs to be
changed. If parties have as much or equal documentation like these parties and
it doesn’t meet the requirements for SoF then Idaho’s case law is inadequate to
accommodate business transactions in today’s world. Idaho law is not in line
with the majority of jurisdiction and should follow others toward a more
updated and modern law. Idaho should use a 70-year old decision to determine if
a enforceable agreement was made in today’s world. Court should consider whether
this law and its application is outdated and in need of change.