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45 Cards in this Set

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What does the statute of frauds require of all contracts for the sale of an interest in land?
It must be in writing and signed by the party to be charged in order for it to be enforceable
Statute of Frauds

5 elements of a writing
1) Identification of the parties
2) Identification of land
3) Words indicating intention to sell or buy
4) Essential Terms and conditions
5) A signiture of the party to be charged -- both parties
Identification of land
1) does not require a formal metes and bounds description
2) A street address is acceptable if unambiguous
3) Without identification, the deed does not act as notice to bonafide purchaser for value
Words indicating intention to sell
1) Invitation in letter is not sufficient
2) Look to intent, not common law language requirements -- look to whole instrument and arrangement
Essential Terms and Conditions
1) Manner of payment
2) Price - if not agreed upon -- set reasonable price
3) Subject to financing clause
Does the Statute of Frauds require a formal contract?
No, it can be a memorandum or formal contract. It just has to be a writing
Partial Performance Exception to the statute of frauds
Part performance exception - allows a court of equity to specifically enforce an oral contract for sale of land when a party has in reliance of a contract asa evidenced by an act of unequivocal reference to a contract, and when injustice can be avoided by enforcement because of unavailability of other remedies
Buyers actions which may allow him to receive the partial performance exception
1) pay all or part of the purchase price
2) entering into possession
3) make improvements
Exceptions to the Statute of Frauds
1) Partial Performance
2) Equitable Estoppel
Equitable Estoppel Exception to the Statute of Frauds
can be used to prevent a party from raising the statute asa a defense when unconscionable injury would result from denying specific performance
What does a person have to show to receive the Equitable Estoppel Exception
1) that a definate oral contract exists
2) one acted as a result of and in justifiable reliance upon that contract, AND
3) that, in having so acted, one substantially altered his or her position, so that the other party's refusing to execute the contract amounts to such a fraud on the claimant that damages are an inadequate remedy
Alternatives to Statute of Frauds
1) Constructive Trust
2) Resulting trust
Constructive trust
trust applied by court to avoid unjust enrichment
Resulting Trust
1 party paying money but title vested in another party; trust benefits party that supplies consideration
Present Estate
an estate that carries with it a present right to exclusive possession of land
Two Types of Present Estates
1) Freehold
2) Nonfreehold
Freehold Estates
1) Fee Simple Absolute and defeasible
2) Fee tail
3) life estate
NonFreehold Estates
1) estate for years
2) periodic estate
3) estate at will
4) estate a sufferance
Future Interest
is an interest in land which may become possessory, but which is not now possessory, and is a segment of ownership measured in terms of duration
5 Types of Future Interests
1) possibility of reverter
2) right of entry
3) reversion
4) remainder
5) executory interest
Fee Simple Absolute
an estate in which the owner holds its interests for an undivided and unlimited time, therefore, there are no future interests following fee simple absolute
Words that create Fee Simple Absolute
"and his heirs" was needed at early common law, but today property is assumed to pass in fee simple in a will

Need term "for life" for life estate
Fee Simple Absolute

Statute of Wills
Made land devisable; After Statute Fee Simple had three characteristics
1) freely alienable during life
2) can be disposed of at death by will
3) If not disposed of by will, it will pass to woner's heirs
Fee Simple Absolute

Inheritability
if owner dies intestatae, fee simplee generally inherited by heirs
1) Through primogeniture, it would go to oldest son
Fee Simple Defeasible
and estate where the use of land is subject to a restriction
Three types of Fee Simple Defeasible
1) Fee Simple Determinable
2) Fee Simple Subject to a condition subsequent
3) Fee simple subject to an executory interest
Fee Simple Determinable
an estate which arises where the conveying instrument first creates a fee simple, but instead of making it absolute, it includes a condition or limitation that would terminate the fee simple if and when the condition occurs
Example of Fee Simple Determinable
O to A for so long as no alcoholic beverages are consumed on the premises
When do future interests become vested in fee simple determinable
Future interests that follow fee simple determinable become vested immediately upon the happening of the condition because it terminates automatically
What is required by the transferor of the estate to create a fee simple determinable?
the transferor must intend for the fee simple to terminate automatically for a fee simple determinable to be created
When will a court find that a fee simple determinable exists?
A court will only find that a fee simple determinable exists if there are words that raise the presumption of automatic termination or a combination of words clearly indicating the transferor's intent to terminate the estate automatically
Key words that create a Fee Simple Determinable
while, during, until, for so long as
What are the possible future interests associated with Fee Simple Determinable
1) possibility of reverter owned by transferor
2) Executory interests owned by third party
Fee Simple Subject to a Condition Subsequent
an estate which araises when the transferring instrument has created a fee simple but also includes a condition thata either the transferor (or its successor in interest) or a a third party will have a right to enter or a power to terminate the fee simple when the stated condition occurs
Example of Fee Simple Subject to a Condition Subsequent
A, owning Blackacre in fee simple, conveys it to “B and his heirs, on the express condition that the premises are never to be used by B for the sale of liquor and in the event that they are so used, then A or her heirs may enter and terminate the estate hereby conveyed.” B has a fee simple subject to a condition subsequent.
If the condition of a Fee Simple Subject to Condition Subsequent occurs, when will the fee simple terminate?
it will not terminate until the holder of the power to terminate exercises thata power
* there is no need for actual re-entry, starting action is enough
Future Interests Associated with Fee Simple subject to a condition Subsequent
1) Right of Re-Entry owned by the transferor
2) Executory interest owned by third party who has been transferred the power of termination in the same instrument creating the subject fee estate
Fee Simple subject to condition subsequent

whether the holder of a future interest does actually have the power to terminate depends on?
the intend of the transferor
What are words that indicate the transferor of a fee simplee intended to make in a fee simple subject to condition subsequent?
1) provided
2) however
3) but it
4) on condition that
5) if however
** Must have a re-entry clause to create power of termination
Fee Simple Subject to Condition Subsequent

Is there a need to have an express prvision for power to terminate?
yes....there is a need to have an express provision for power to terminate because courts prefer not to find defeasible estates
In distinguishing between a Fee simple determinable and a condition subsequent courts look at
1. Ambiguous language

2. terminating event
If the language is ambiguous what are the construction rules courts use to determine whether it is determinable or condition subsequent?
1) A fee simple subject to condition subsequent is preferred because courts abhor forfeiture
2) If the purpose is to compel compliance with condition with penalty of forfeiture they will view as determinable
3. If intent is to give land for stated use, and estate will cease when use ended, they will view as condition subsequent
4) If there is an inter vivos conveyance, then they will contrue ambiguity in favor of grantee
In distinguishing between a fee simple determinable and condition subsequent, the terminating event must be clearly established
1) If there is a minor deviation then ther eis not forfeiture
2) If grantor does not terminate condition fee within reasonable time after breach, he may be held to waive his right to do so. The grantee could claim waiver or estoppel
3. there is no forfeiture if the purpose of the special limitation is still substantially achieved
4) the court may grant equitable relief against forfeiture if the grantor may be made whole otherwise by awarding damages or injunction
Executory Interest
a fee simple estate which may terminate automatically and pass to one other than the original transferor (or its successors in interest) upon a designated contingency's occurring
When do Executory Interests Terminate?
Terminates automatically upon the occurance of the condition, like determinable
Unlike determinable, it passes to a third party rather than the grantor