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earnest money?

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D

day1

Junior Member
What is the name of your state? Wisconsin
We put down earnest money on a house from a private owner
We needed to sell our home first and explained this to the owner
Yet some days later they wanted us to sign a contract giving us
a closing date of no later then June 30th 2005. With no conditions
stating we would buy after the sale of our home. We refused to sign
the binding contract instead ask for our earnest money back.
They refused . We only have a receipt of the earnest money given
Without no binding contract can they keep the money?
 


S

seniorjudge

Guest
day1 said:
What is the name of your state? Wisconsin
We put down earnest money on a house from a private owner
We needed to sell our home first and explained this to the owner
Yet some days later they wanted us to sign a contract giving us
a closing date of no later then June 30th 2005. With no conditions
stating we would buy after the sale of our home. We refused to sign
the binding contract instead ask for our earnest money back.
They refused . We only have a receipt of the earnest money given
Without no binding contract can they keep the money?
Click to expand...
Sue them in small claims to get the money back. Verbal real estate agreements cannot be enforced.
 
S

shortbus

Member
seniorjudge said:
Verbal real estate agreements cannot be enforced.
Click to expand...
I see this all the time on this forum. It is not always true.

Real estate contracts are governed by the statute of frauds, which does require agreements be written. HOWEVER. In a case where there is no written document, acts of "part performance" by the parties can lower this evidentiary bar.

One party put down earnest money and the other party gave a receipt. This is an act of payment implying a contract existed between the parties. It's not a slam-dunk by any stretch, but be aware that if you undertake activities AS IF you had a contract, those can be used as evidence that a contract in fact existed. You can't just say "oh it wasn't written" and get off the hook.
 
S

seniorjudge

Guest
shortbus said:
I see this all the time on this forum. It is not always true.

Real estate contracts are governed by the statute of frauds, which does require agreements be written. HOWEVER. In a case where there is no written document, acts of "part performance" by the parties can lower this evidentiary bar.

One party put down earnest money and the other party gave a receipt. This is an act of payment implying a contract existed between the parties. It's not a slam-dunk by any stretch, but be aware that if you undertake activities AS IF you had a contract, those can be used as evidence that a contract in fact existed. You can't just say "oh it wasn't written" and get off the hook.
Click to expand...
Google wisconsin detrimental reliance


Creyts Complex's primary argument at trial and on ap- peal, however, is based on Wisconsin's codified detrimental reliance exception to the statute of frauds. WIS. STAT. sec. 706.04(3)(b). Under this provision, a party may be estopped from claiming that an oral agreement to convey land does not satisfy the statute of frauds so long as (1) the terms of the agreement may be satisfactorily proved, (2) the par- ty seeking to enforce the contract in good faith relied on the agreement to his detriment, and (3) the relying par- ty's detriment was incurred with the knowing consent or approval of the party sought to be estopped.

Read the whole thing (and look up that statute also):

http://caselaw.lp.findlaw.com/cgi-bin/getcase.pl?court=7th&navby=case&no=952840

Shortbus, you are correct and I am going to steal this thread for a standard response on oral contracts.

We do hear this all the time and (speaking for myself) if I see no "detrimental reliance" then I don't even mention it.

Thanks....
 
J

john123456

Member
shortbus said:
I see this all the time on this forum. It is not always true.

Real estate contracts are governed by the statute of frauds, which does require agreements be written. HOWEVER. In a case where there is no written document, acts of "part performance" by the parties can lower this evidentiary bar.

One party put down earnest money and the other party gave a receipt. This is an act of payment implying a contract existed between the parties. It's not a slam-dunk by any stretch, but be aware that if you undertake activities AS IF you had a contract, those can be used as evidence that a contract in fact existed. You can't just say "oh it wasn't written" and get off the hook.
Click to expand...
shortbus:

Excellent insight, thanks.
 
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