Last updated: May 2006

The following question was submitted to John Roska, an attorney/writer whose weekly newspaper column, "Q&A: The Law," runs in the St. Louis Post-Dispatch (Illinois Edition) and the Champaign News Gazette.

Question

My father’s neighbor says my father agreed to sell him the vacant lot that sits between their property. The only “contract” the neighbor has is a scrap of paper my father wrote on saying he’d deed the property over if the neighbor paid a certain amount. Neither my father nor the neighbor signed it. My father’s now gotten better offers for the lot, and would like to sell to someone else. The neighbor’s says he’ll sue if my father doesn’t sell to him. I say there’s no valid contract to sell the lot, so the neighbor has nothing to enforce. Does the neighbor have a case?

Answer

Even though Illinois law says land contracts should be in writing, and signed, your father’s neighbor may still may have a valid contract. The neighbor could have a pretty good case if he’s actually been paying for the lot.

Oral contracts—even to sell land—can be valid, but they just invite trouble. Unless things are pinned down in writing, people can argue about what was supposed to happen. And arguments over big ticket items like real estate tend to get serious.

As a result, Illinois, like probably just about every other state, requires land contracts to be in writing. The venerable Statute of Frauds says that contracts to sell land are not enforceable “unless such contract or some memorandum or note thereof shall be in writing, and signed by the party to be charged therewith.”

Besides the Statute of Fraud’s requirement of something in writing with one signature on it (the signature of the person who’d be sued), court cases have said that land contracts must identify the buyer and seller, identify the property being sold with some description, and state the sale price and terms.

The main thing lacking on the scrap of paper the neighbor has is your father’s signature. You might think that no signature means no contract, but naturally there are exceptions to the Statute of Frauds. The most important one says that a contract that doesn’t meet the Statute of Frauds requirements can still be enforceable if there’s been “partial performance.”

That occurs when the buyer or seller have done something that shows they’re holding up their end of a deal. By performing part of the agreement, they’ve gotten far enough along so that it would be unfair to stop and leave them empty handed.

The neighbor may be able to prove partial performance by showing that he’s been making payments based on the agreement he thought he’d made. In other cases, actually moving onto the property has been considered evidence of partial performance.

As lawyers say, proving partial performance “takes the contract out of” the Statute of Frauds. It turns an otherwise invalid contract into a valid, enforceable one.

The moral: do it yourself land sales are a bad idea. Pay a lawyer to do the contract and sale for you.

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