Formality of Contract

CASE STUDY

Barney and his wife Clare had been separated for some time and came to an agreement in relation to maintenance and property matters. The agreement was orally reached at a meeting on 30 September last year. Subsequently there were three more e-mail exchanges on 1st, 2nd and 4th of October which confirmed their agreement that Clare would pay Barney $250,000 for his interest in the matrimonial home and $1000 per month in maintenance. In return Barney agreed to transfer his half of the property to Clare. Clare has paid the maintenance but Barney refuses to sign the transfer of land which was prepared by Clare’s solicitors.

Required:

Discuss whether the contract between Barney and Clare lacks formality.

Answer:

The area of law involved in this question is the formalities of a contract, in particular Statute of Frauds and Doctrine of Part Performance.

A Statute of Frauds requires that certain contracts be in writing, and that they be signed by all parties to be bound by the contract. The most common types of contracts to which a Statute of Frauds applies is for a contract involving the sale or transfer of land and contracts to answer for the debt or duty of another.

The Statute requires contracts for sale of land and property to be:

1. In writing

* Involve some written evidence

* Material terms of the contract WHO are the parties to the contract, WHAT the property in question (subject matter) and HOW MUCH the price for the property. May be contained in numerous documents but all must be linked illustrated in Long v. Millar where it was held that the written agreement and signed receipt could be linked together therefore forming sufficient memorandum.

* The memorandum or note need not have been in existence when the contract arose, what is required is that it is in existence before any enforcement illustrated in Bailey v. Sweeting where it was held that the letter of repudiation was sufficient memorandum of the parties’...