Written Contracts & Remedies?

John and Diana Smith inherited a one third interest in a condo in Midtown Manhattan. The Smith’s bought out the other heirs and owned it exclusively taking out a mortgage for $500,000. John Smith was friends with Hector Rodriquez. John offered Hector and his wife Isabella an opportunity to purchase the condo. The deal included a $50,000 down payment toward the purchase price of $800,000. The Rodriquez’s were to pay all the mortgage and maintenance fees on the property for five years and any time during the five-year period they could elect to purchase the condo. All this was agreed to orally. The Rodriquez’s paid the down payment and cash payments every month to the Smiths equal to the mortgage and maintenance fees. They also made improvements to the condo. In October 2006, four years after the deal was made, the Smiths reneged on the sale/option agreement. At this time the condo had risen in value to between $1.2 and $1.5 million dollars. The Rodriquez’s sued for specific performance of the sales agreement. The Smiths defended, alleging that the oral promise to sell real estate was not enforceable under the Statute of Frauds. Questions: Does the Statute of Frauds apply? Do the Rodriquez’s have any legal option to get around the Statute of Frauds? If yes what can they argue and what is their likelihood of success? How else might a court resolve this dispute? What about Specific Performance is it an appropriate remedy in this case?

Read more: Written Contracts & Remedies?