Chapter 17 - § 17.2 • CONTRACTS TO BUY AND SELL
| Jurisdiction | Colorado |
§ 17.2.1—In General
A contract to buy and sell real estate is a contract containing, among other provisions, a promise by the buyer to pay for the land and a promise by the seller to deliver a deed to the land; the contract may and usually does include other provisions more or less subsidiary to the contract to buy and sell.17
A necessary term of a land sales contract may be supplied by presumption, rule, custom, or usage.18 Indefiniteness in a term that would otherwise render the contract unenforceable for failure of mutual assent may be cured by subsequent performance.19
An implied duty of good faith and fair dealing applies to purchaser and vendor's obligations under a land sales contract.20
For the disclosures required of a seller of a common interest community unit, see § 9.5.5.
The validity of a contract for the purchase of real property is not affected by the fact that the underlying brokerage agreement is void because the supposed broker is unlicensed.21
§ 17.2.2—Statute of Frauds
A land contract must satisfy the Statute of Frauds,22 that is, it must be in writing23 and must contain the names of the parties, the terms and conditions, a description of the property,24 and the consideration,25 and must be subscribed26 by the party by whom the conveyance is to be made.27 The term "subscribed" requires a signature at the end of a printed or written document.28 The contract may be subscribed by an agent lawfully authorized in writing;29 where the agent is not so authorized, the contract is not binding.30
An oral contract may be admissible in evidence if it is offered for purposes other than seeking its enforcement.31 Where an agreement to purchase is relied upon to disprove a tenancy, it is immaterial whether the agreement is enforceable or not, and therefore the Statute of Frauds is not applicable.32 A grubstake agreement is not within the Statute of Frauds,33 nor is a contract authorizing an agent to negotiate a purchase of real property,34 or an agreement restricting the use of land.35 Parol evidence is admissible to show that no agreement in fact existed.36
Where more than one writing is used to satisfy the requirements of the Statute of Frauds, some nexus between the writings must be shown. The nexus need not be in the form of express cross references between the documents; the requirement may be satisfied by parol evidence that the writings refer to the same subject matter or transaction.37
Terms and conditions: Where the contract is silent, a sale for cash is presumed.38 Where no time for performance is specified, the law implies a reasonable time, and where no place of performance is specified, the law implies the residence of the grantor.39
Description: A description of property as being "my entire interest in the lands and properties formerly belonging to the Pio Michelli estate" is sufficient to permit the use of other documentary or parol evidence to identify the property.40
Consideration: Where part payment is recited in a contract, the amount of consideration previously paid is not an essential element of the agreement, and it is sufficient compliance with the Statute of Frauds if the agreement expresses the consideration remaining unpaid.41 A price term is sufficiently definite when it provides for an appraisal to set the purchase price when the party by whom the conveyance is to be made is willing to treat the contract as valid.42 One who accepts benefits under a contract of sale and purchase is not in a position to claim that the contract lacks consideration.43
A third party may not assert the Statute of Frauds when the party by whom the conveyance is to be made is willing to treat the contract as valid.44 Similarly, a person who has made an oral agreement to perform services in return for land cannot assert the Statute of Frauds in an action for the value of such services where the other party is willing to convey the land in accordance with the oral contract.45
All oral agreements between the parties relating to the subject matter of the contract that preceded or accompanied the execution of the contract are merged into it,46 but where the execution of the written contract has been induced by a contemporaneous parol promise not directly relating to the subject matter of the contract and such promise is not inconsistent with the provisions of the written contract, it will not be considered merged in the contract and evidence of such parol promise is admissible.47 The circumstances surrounding the making of the contract may be considered when the intent of the parties in the making of the contract is not clear from its terms.48
As a general rule, a contract for the sale of land required to be in writing cannot be validly changed or modified as to a material condition by a subsequent oral agreement, without more, so as to make the original written agreement, as orally modified, an enforceable obligation.49 Colorado recognizes two exceptions to this general rule: (1) when the subsequent oral agreement amounts to a revocation of the written contract,50 and (2) when a party consents to or requests a postponement of performance and the other party has acted on such request or consent, even though performance at the time specified may be of the essence of the contract.51 Thus, where a party secures an oral agreement to extend the time for performance of a contract required by the Statute of Frauds to be in writing, he or she is estopped to claim the benefit of the statute where the other party refrained from performance within the time specified in the written contract in reliance on the oral agreement to extend.52 The rule regarding postponement or extension of time for performance appears to be merely a particular application of the rule that the Statute of Frauds does not prevent enforcement of oral modifications to a contract for the sale of land where reinstatement of the original contract terms would be unjust in view of a material change of position in reliance on the subsequent agreement.53
Full performance54 or substantial part performance55 of the terms of an oral contract may render it enforceable if the acts of performance are specifically related to the conveyance of the realty.56 Part performance is unavailing where the oral agreement does not contain all the terms necessary to make it a complete and legal contract.57 In the absence of estoppel, part performance does not take the place of a writing where one of several parties by whom the conveyance is to be made does not agree to the contract.58 Mere tender of performance or part performance is not sufficient.59
An oral agreement to reduce to writing a contract within the Statute of Frauds does not remove the contract from the operation of the Statute of Frauds.60
§ 17.2.3—Possession
In the absence of an express or implied provision in a contract conferring the right, a purchaser is not entitled to possession before payment of the purchase price;61 when admitted to possession, he or she is said to hold as a licensee of the vendor.62
A purchaser in possession of real property may not question the vendor's title63 or assert a superior title in himself or herself as against the vendor.64 It is, of course, possible for a purchaser to repudiate the contract and assert his or her own rights. However, when the purchaser does so, the repudiation must be clear and...
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