Contracts
Exam 18
Fact pattern
Owner owned plot 312 in New City’s community gardens. On January 16, Gardener wrote and signed a letter to Owner stating that a mutual friend had told him that Owner was considering selling plot 312 and, if so, he would be very interested in purchasing it. On January 19, Owner wrote back, via signed letter:
Yes, I am considering selling. What are you willing to pay?
Gardener replied on January 22, again via signed letter:
What wonderful news! I would be happy to pay $10,000 for the plot. What if I mail you a personal check, and you could mail me the deed and keys to the garden fence on February 1?
Owner wrote back on January 25, by signed letter:
$10,000 for plot 312 is a fair price. My accountant tells me that it will be better if the plot changes hands after March 1. How about: (1) on March 2, you drop off a check for $10,000; (2) after I receive your check, I will call the garden manager and tell him to expect a call from you; (3) I will then call you to say I’ve spoken with the manager; and (4) you then go to the garden office and fill out their required paperwork for the plot to change owners. Does that work?
Gardener replied on January 28 with a signed letter stating only:
That arrangement works for me. I’m starting some seedlings in containers in my apartment now!
On March 2, Gardener dropped off a check for $10,000 to Owner. On March 4, after receiving the check, Owner called the garden manager and then called Gardener to let him know.
On March 6, however, Gardener called Owner to say that he had just found another garden plot for only $8,000, would cancel his check, and would not fill out the change-of-plot-owner paperwork. Owner objected, but Gardener argued that there was no enforceable contract because (1) they had no fully signed document setting out a written agreement and (2) he had never performed step four in Owner’s January 25 letter.
Assume that New City had adopted the common-law rules in the Restatement (Second) of Contracts.
Questions
Does the absence of a single written document signed by both parties prevent Gardener and Owner from having an enforceable contract? Explain.
Does the fact that Gardener did not perform step four in Owner’s January 25 letter prevent Gardener and Owner from having an enforceable contract? Explain.