The Gazette 1980

GAZETTE

APRIL 1980

When is a Contract — An Addendum By John F. Buckley

Since the publication of "When is a Contract" some further Court decisions on the subject discussed there have been given and the writer has delivered himself of a lecture on the topic to a Joint Meeting of the Dublin Solicitors' Bar Association and the General Practices Section of the Royal Institution of Chartered Surveyors, which led to a most useful and enlightening (for the writer at least) question and discussion session. The contribu- tion of Ian French, F.R.I.C.S., to the Joint Meeting appears earlier in this issue and the summary of the writer's talk and of the question and discussion session may be a useful addendum. In view of the confusion of thought which abounds in all discussions on the topic, it may be salutary to refer back to the reasons for the introduction of the Statute of Frauds - what was the mischief it was intended to counter? The Statute introduced a rule of evidence - not a piece of substantive law - "for the prevention of many fraudulent practices which are commonly endeavoured to be upheld by perjury and subornation of perjury" at a time when neither the Plaintiff nor the Defendant were allowed to give evidence in an action to set up a contract. Like many well meaning pieces of legislation it has not always achieved the aims of its promoters. Professor Farrand has referred to "nearly three centuries of general abuse and judicial evasion". Sir Raymond Walton says ft may be doubted however, whether in the long run, it did not do more to abet frauds than to prevent them, as it enabled unscrupulous vendors or purchasers to resile from deliberate, but oral bargains". It may be helpful to consider the actual wording of Section 2 of the Statute of Frauds (Ireland) 1695 so far as •t relates to contracts for the sale of land. ". . . no action shall be brought whereby to charge . . ., any person . . . of any contract or sale of lands, tenements or heredita- ments, or any interest in or concerning them . . . unless the agreement upon which such action shall be brought, °r some memorandum or note thereof, shall be in writing, and signed by the party to be charged therewith, or some other person thereunto by him lawfully authorised." If is clear that the memorandum must record a completed agreement and it is common to refer to the essential terms as "the 4 Ps": (1) the Parties; (2) the Property; (3) the Price; (4) the other Provisions. (1) The Parties must be ascertainable not necessarily stated, but not so vague as merely "the Vendor" or "the Owner"; (2) The Property need only be so described as to be identifiable - even "my house" may be sufficient. The interest being sold need not be defined. It will be taken that an unencumbered freehold is implied, unless the Plaintiff knew that some lesser interest was in sale

(Timmins v. Moreland Street Property Company (1958) Ch. 110); (3) The Price, or the method of its ascertainment, must be stated - "at a fair price" - "at a reasonable valuation" have been held to be sufficient. (4) The other Provisions - only if there are no other provisions agreed can the omission of them leave the memorandum in order. In Kelly v. Park Hall School no date for the signing of the contract was agreed and the Court held that this was unnecessary. The Court will be willing to imply terms into agree- ments, such as that vacant possession will be given on completion; or that completion must take place within a reasonable time; but there is one significant exception to what can be implied and that is where the agreement is alleged to be one for the taking of a lease. In such a case the date of commencement of the lease must be agreed or ascertained. The Supreme Court, in O'Flaherty v. Arvan Properties, has recently confirmed this. It is possible for the parties setting up the agreement to waive certain provisions. If the memorandum were complete without a provision exclusively benefiting the Plaintiff (and not a material one), the Plaintiff can waive it and the memorandum will stand. If the memorandum is complete without a stipulation to the detriment of the Plaintiff, he may submit to it and the memorandum will stand. The equitable procedure known as rectification is avail- able if a term has been omitted from the agreement by common mistake. The equitable doctrine of part performance may be invoked by a party, even where there is no note or memorandum in writing but, before this doctrine can operate, the following conditions must apply. (1) there is proper parol evidence of the agreement; (2) the contract is one which can be enforced by the Court; (3) the acts of part performance must be such as to render it a fraud in the defendant to take advantage of an oral contract; (4) the acts of part performance on the Plaintiffs part must be referable to some contract and may be referable to the one alleged. Acts of part performance which have been held to be sufficient are the taking of possession by the Plaintiff, or the carrying out of substantial alterations by the Plaintiff. Until recently, it was firmly believed that the mere payment of money was not of itself a sufficient act of part performance, but there are signs that this doctrine may no longer be as firm as it was thought to be. On the question left unanswered between the some- what conflicting decisions of the Court of Appeal in England in Law v. Jones and Tiverston Estates v. Wear- well, Mr. Justice Hamilton, in his judgement in the case of Mclnerney v. Roper, interpreted the judgement of Mr. Justice Henchy in Kelly v. Park Hall School as confirm-

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