Question

PLEASE USE IRAC

Jackie, a wealthy movie actress from Hollywood, decided to leave the busy city and move to peaceful northern California. When looking for a house, Jackie decided to look at wine country, Napa Valley. In the center of Napa Valley, Jackie found one of a kind castle with acres of vineyards, the castle had 100 year-old colored stones no longer available on the market. Jackie contacted the seller, Danny, and asked Danny what the price was. Danny stated that the price was ten million dollars ($10,000,000) but he already had an offer from his friend, Paul, for eight million dollars ($8,000,000). Anxious about assuring the property, Jackie offered Danny one thousand dollars ($1000) to keep the offer of ten million dollars ($10,000,000) open for a month. Not having a better offer Danny agreed. A day later, Paul heard about Jackie’s offer and decided to offer Danny eleven million dollars ($11,000,000) cash but Danny had to move out by the end of the week and accept the offer by the end of the day. Excited about the possibility of being able to finish the sale, Danny verbally accepted Paul’s offer and told Paul, “I don’t need to move, the castle is already move in ready.” The next day, Paul hired a moving company and began to move all his furniture, clothes, and personal belongs. Paul also noticed that the back porch was not big enough so he built a new porch with authentic California redwood. Besides building a new porch, Paul also painted the interior of the castle a lighter color.

When Jackie found out that Danny sold the property to Paul, Jackie got upset and told Danny, “I will find the best lawyer in California and sue you!” Danny replied to Jackie, “I have the right to revoke my offer whenever I want to, I will mail you a check with your one thousand dollars.” After only being in the castle for three weeks, Paul gets a call from Danny. Danny stated that he will have to cancel the property contract because the selling of the castle has only caused problems. Danny states that the contract was never in writing and Paul cannot ask a court to enforce it.

Paul comes to your office and is wondering whether there are any defenses that Danny may bring up to stop the enforcement of the contract? He wants to make sure that Danny cannot stop him from keeping the Napa Valley Castle.

Answer 1

Issue: Danny is trying to breach the verbal contract between him and Paul about the sale of the Napa Valley Castle.

Rule: An oral contract is a spoken agreement between parties that is sometimes legally binding. An issue that arises with proving an oral contract is the lack of tangible evidence. An oral contract legal case often relies on the fact that one or both parties are clearly relying on the agreement. Verbal contracts are best as a simple agreement with easy-to-understand terms and evidence that the agreement exists.

Analysis: Danny wants to sell the castle and has discussions with 2 parties about it. He sells the castle to Paul based on a verbal agreement of 11 million dollars and moving out in 1 week. However, he had also accepted a token amount of $1000 from Jackie to book the castle before the sale. Danny promised Jackie to return the $1000 as he went back on the offer. After 3 weeks, Danny wants the possession of the castle again from Paul and says that since there was no written contract, he cannot go to the court.

Conclusion: This is a case of breach of a verbal contract that can occur when an agreement to do something, sell something, or buy something is in place between two parties and one party fails to comply with the agreed-upon terms. Paul has to prove the verbal contract between him and Danny to keep the possession of the castle with him.