Hickey v. Green

Appeals Court of Massachusetts, Plymouth
14 Mass. App. Ct. 671, 442 N.E.2d 37 (1982)

ELI5:

Rule of Law:

An oral contract for the transfer of an interest in land may be specifically enforced, notwithstanding the Statute of Frauds, if the party seeking enforcement has reasonably relied on the contract to their detriment and injustice can only be avoided by enforcement.

Facts:

In July 1980, Gladys Green advertised a lot (Lot S) for sale.
On July 12, 1980, the Hickeys and Green orally agreed to the sale of Lot S for $15,000.
The Hickeys gave Green a deposit check for $500, which Green accepted but never cashed or endorsed.
The Hickeys informed Green of their intention to sell their existing home and build a new one on Lot S.
In reliance on the oral agreement with Green, the Hickeys advertised their home for sale and accepted a $500 deposit from a buyer.
On July 24, 1980, Green informed the Hickeys that she no longer intended to sell the lot to them, having decided to sell it to another party for $16,000.
The Hickeys offered to match the $16,000 price, but Green refused.

Procedural Posture:

The Hickeys filed a complaint in the Massachusetts Superior Court (a trial court) seeking specific performance of the oral contract.
Green asserted the Statute of Frauds as a defense, arguing the oral contract was unenforceable.
The trial judge granted specific performance for the Hickeys.
Green (as appellant) appealed the trial court's judgment to the Appeals Court of Massachusetts, with the Hickeys as appellees.

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Issue:

Does a party's reasonable reliance on an oral contract for the sale of land, which causes them to materially change their position by entering into a binding agreement to sell their own home, permit specific enforcement of the contract despite the Statute of Frauds?

Opinions:

Majority - Cutter, J.

Yes. A contract for the sale of land that does not comply with the Statute of Frauds may be specifically enforced if the party seeking enforcement has so changed their position in reasonable reliance on the contract that injustice can only be avoided by specific enforcement. The court adopted the modern rule articulated in the Restatement (Second) of Contracts § 129. Here, Green knew the Hickeys were planning to sell their home to finance the purchase and construction on Lot S. The Hickeys' reliance on Green's promise was reasonable and foreseeable when they entered a binding contract to sell their own house. Green's repudiation of the admitted oral contract was solely to secure a better price, and her conduct cannot be condoned in equity. To allow Green to use the Statute of Frauds as a defense after the Hickeys foreseeably and detrimentally relied on her promise would be unjust.

Analysis:

This decision formally aligns Massachusetts law with the more flexible, modern approach of the Restatement (Second) of Contracts § 129 regarding the Statute of Frauds for land contracts. It expands the part performance doctrine beyond traditional requirements like possession and improvements, establishing that other forms of significant, foreseeable reliance can suffice to invoke equitable estoppel. By focusing on the injustice that would result from non-enforcement after detrimental reliance, the case broadens the circumstances under which an oral land contract can be enforced. This holding protects parties who act in good faith on oral promises and are subsequently harmed when the other party backs out, especially when the oral contract itself is not in dispute.

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