Case Law Summaries

Taylor v. Thiemeyer

• Opinion Date: January 24, 2001
• Real Property Law
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CONTRACTS; STATUTE OF FRAUDS—An exchange of letters culminating in an unequivocal acceptance of a seller’s terms can form a contract even if the acceptance recites that a formal contract would be prepared by the buyer’s attorney.

A summer tenant sought to buy the house that she had rented for about ten previous seasons. She made an oral offer which was rejected. She then made a slightly higher written offer. In response, the owner made notations on the back of the letter, essentially to the effect that a stated higher figure would be acceptable. In a written communication, the tenant increased her offer to the amount that the landlord had requested. In response, the owner stated: “I will accept your offer of $260,000 for the property at 216 25th St. in Avalon with the following exceptions.” Before a contract could be drawn, the owner received a significantly higher offer. Because of that offer, the owner sent his tenant the letter, thanking her for her offer and stating “pon further consideration and discussion, I have decided to retain the property for my own use.” Without knowledge of the letter from the owner, the tenant sent a letter that very same day thanking him for his acceptance of the offer and telling the owner that the tenant would have her real estate lawyer draw up the “formal agreement of sale.” The owner closed on the second sale. The tenant then filed an action seeking specific performance, damages, and attorney’s fees. The lower court “found that the letters exchanged between [the tenant and the owner] sufficiently identified the property, nature of the interest being transferred, purchase price and parties involved.” Consequently, the lower court found the requirements of the Statute of Frauds were satisfied and therefore that an enforceable contract existed between the tenant and the building owner. The Appellate Division affirmed. In the Court’s view, when the tenant accepted the owner’s offer without objecting to the terms in his counteroffer, this manifested an agreement with the owner’s proposed terms. The Court found no reason to interfere with the lower court’s findings that a mortgage clause and formal written agreement were minor matters not required to enforce the contract, but rather a mere formality. According to the Court, “the evidence was insufficient to conclude the parties only intended to be bound by a formal written agreement signed by all parties.” It was clear from the evidence that the second buyer was aware of the agreement that had previously been reached between the tenant and the owner. As a result, the lower court found that the owner breached the contract and the second buyer’s conduct had been wrongful and constituted an interference with the tenant’s contractual rights.