Legal Updates

The writing requirement for real estate transactions can be mitigated depending on the circumstances of the case, especially in cases of a finished act

September 19, 2021
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A seller of rights in real estate sold such to a purchase but no written sale agreement was signed even though payment was made and the agreement was consummated in fact. After then years the seller sought to cancel the agreement unless it is paid an additional consideration.

The Court held that the sale agreement is valid. While the statute of frauds demands a material writing requirement for real estate transactions, there is a leniency in relation to this obligation in special cases that justify it, based on the principle of good faith in the pre-contractual stage and due to principles of fairness, which sometimes justify granting legal validity of a real estate transaction. Here, the transaction was executed by conduct of the parties over the years and the seller's attempt, more than a decade after the transaction was formed, to register the rights in the real estate in its name unilaterally with a demand for additional consideration, beyond the consideration already received, is extreme and a clear sign of bad faith. Under such circumstances, there is room to be lenient with the material writing requirement and a valid sale agreement has been concluded between the parties.