(3a) Jackie's Arguments for Specific Performance and Pete's Counterarguments

       Jackie, in support of her demand for specific performance, should argue that she and Pete did indeed have a contract for Rivah House--as evidenced by Pete's letter of 20 May and that based on the equitable principle that all land is unique--the Court should grant specific performance and order that Rivah House be conveyed to Jackie.

       Pete, in response, should argue that the statute of frauds was not satisfied and he is thus entitled to a statute of frauds defense--meaning that there is no legally enforceable contract with Jackie. The statute of frauds is a statute aimed at discouraging and prevent fraud based on attempts to have courts enforce contracts that do not actually exist.

       Pete also should argue that specific performance should be denied as Rivah House was legally conveyed to the Baileys--who paid value for Rivah House and did not have notice of any alleged agreement Pete had to convey the property to Jackie. Notice in the Commonwealth may consist of either actual notice or record notice. A bona fide purchaser for value who does not have notice of a prior conveyance is entitled to keep the property.

       In this case, the Baileys took Rivah House for value--as evidence by the $438,500 cash payment to Pete and without any notice of any prior conveyance of the property to Jackie. Assuming the Baileys lacked actual notice (that Pete had not discussed his alleged conveyance to Jackie with the Baileys), the Baileys clearly did not have record notice as Jackie had no deed to record. This qualifies the Baileys as bona fide purchasers--meaning that the Court cannot grant specific performance of the conveyance to Jackie.

       (3b) Jackie's Claim for Breach of Contract Damages and Pete's Counterarguments

      Jackie should argue that Pete's writing of 20 May is evidence that a contract did in fact exist and thus satisfies the statute of frauds--resulting in a legally enforceable contract on which she can collect damages. The 20 May letter from Pete is signed by the party to be charged.

       Pete, in response, should argue that the statute of frauds was not satisfied and thus he is entitled to a statute of frauds defense that there was no legally enforceable contract. The statute of frauds for a realty contract may be satisfied by showing any two of the following three factors: that the buyer made payment for the property--either full or partial; (2) that the buyer possessed the property; and/or (3) that the buyer made substantial improvements to the property.

       In this case, Jackie satisfies none of the three possible means of satisfying the statute of frauds for a realty contract. Based on these facts, Jackie never made any payment at all for Rivah House; she never possessed the property; and thus was incapable of making any improvements whatsoever.

       (3c)

       The Court, based on the fact that Jackie did not satisfy any one of the three required elements of satisfying the statute of frauds for a realty contract, should rule in favor of Pete. As Jackie is required to show two of the three elements to satisfy the statute of frauds--and in this case showed none--she should be awarded no damages.

       If, in the alternative, Jackie were to have prevailed in this case, she would be eligible only to receive contract damages and not specific performance--as--for the reasons outlined above in 3a--the Baileys are bona fide purchasers for value and without notice and thus have rightful and legal title to Rivah House.

(Please note: for the sake of only doing it once, the statute of frauds rule statement and analysis is contained entirely within part (c) of this answer)<.

(a)
In general, specific performance as a remedy is only avaialble in certain circumstances. First, money damages must not be an adequate remedy. This can be proven if the subject matter of the contract is unique. One example of this principal are contracts for the sale of real property, as all real property is considered to be unique. Second, the equitable remedy of specific performance must be feasable. Unfeasablitly can occur for a number of reasons, such as the seller of the contract's subject matter no longer having possession of the property due to having sold it to a third-party bona fide purchaser("BFP"). A BFP is a purchaser for value who takes the property without notice of any encumberances or others with rights to possess. If the BFP does not pay significantly less than fair market value for the property, then a court should refuse to divest the BFP of interest in property when decideding whether or not to impose an equitable remedy under contract law.

In this case, Jackie can argue for specific performance of the contract. The subject matter of the contract between Jackie and Pete was the sale of real property known as The Rivah House. Because all real property is unique, the legal remedy of money damages would be considered inadequate relief for this contract. Additionally, Pete did not sell The Rivah House in good faith, knowingly disposing of property to a third party after (as he admits in the letter) agreeing to sell it at a lower price to Jackie. Moreover, the Baileys can be compensated for the taking of the land in order to convey it to Jackie.

Pete can argue that specific performance is not available for Jackie, even if a legall binding contract existed between them. Pete's main argument would be that specific performance is not feasible, because Pete has conveyed The Rivah House to a third party BFP. Even if Pete were acting in bad faith with the sale, the Baileys paid fair market value for the property (more than Jackie would have paid), and there is no evidence that they were aware or had any notice of the prior contract between Pete and Jackie. Therefore, because The Rivah House has been conveyed to a third party BFP, specific performance is not available.

(b)
Should specific performance not be available, Jackie can argue that she is entitled to damages for a breach of contract. A contract exists when there has been an offer, an acceptance, and there is consideration on both sides. An offer is revoked when the offeree becomes aware, either through actions or words, that the offeror intends to revoke the offer. However, once a contract has been accepted, the offeror cannot revoke the contract. Futhermore, under contract law, when one party breaches a contract, the other party is entitled to the damages caused by the breach. These damages are normally expectation damages, which put the party in the position they would be in had the breaching party not breached.

In this case, Jackie is arguing that a binding contract exists between her and Pete. There was an offer to sell the property, acceptance, and consideration. Even though Pete may claim he revoked the contract over the phone (as mentioned in the letter) this revocation was insufficient to revoke, because it took place after the acceptance of the contract. As discussed further below, Jackie must also argue that the letter memorialized their oral agreement for the sale of The Rivah House and satisfied the statute of frauds. Jackie will argue that Pete breached their contract by selling the property to the Baileys, thus preventing the completiong of the contract with Jackie, because she cannot be conveyed The Rivah House. Therefore, because she cannot be conveyed property, and Pete breached the contract by not conveying it to her, Jackie is owed breach of contract damages.

Pete's only argument to preclude his having to pay breach of contract damages is that there was no contract between him and Jackie. In support of this, he may state that he revoked his offer to sell over the phone, or that the contract does not satisfy the statute of frauds. However, his revocation was insufficient, because it occurred after the acceptance of the contract. Additionally, as will be discussed fully in part (c), the statute of frauds has been satisfied. Pete might also try to argue that any damages would be too speculative. However, as fair market value of real estate can be established (sometimes through sale of the property, as he has just done with the Baileys), this argument will also fail to relieve him of liability for breach of contract.

(c)
The Court should find that there was a contract between Jackie and Pete, and award Jackie breach of contract money damages.

Existence of a Contract - The Court should find that there was a contract between Jackie and Pete which satisfied the statute of frauds. In general, contracts for the sale of land fall under the statute of frauds and require that the agreement be made into a writing. The statute of frauds can be satisfied in two ways. First, the agreement may be put into a writing. While the common law required that this writing have significant details about the transaction (the names of the parties, a description of the land, price, and the signature of the party to be bound), Virginia's courts have stated that the writing need only contain enough information to prove that an agreement was made. Second, the statute of frauds may be satisfied if the purchaser of the land has done two of the following three items: paid some or all of the contract price, taken possession of the property, and/or made improvements on the property.

In this case, the Court should find that the writing requirenment of the statute of frauds has been satisfied. As Jackie has not paid any money, taken possession of the property, or made improvements upon The Rivah House, the only way to satisfy the statute of frauds is via a writing.

Pete's letter to Jackie is sufficient to satisfy the writing requirenments of the statute of frauds in Virginia. In Virginia, because the writing need only establish evidence that an agreement existed, the statements in the letter that Pete was selling the "same property that I had told you [Jackie] I would sell to you," it's mention by name in the letter as The Rivah House, and Pete's signature at the bottom are all more than sufficient evidence to prove that a deal between Pete and Jackie for the sale of The Rivah House had been struck. Therefore, the Court should rule in Jackie's favor.

It may be noted that the letter would fail to satisfy the statute of frauds under the traditional common law approach, because the common law required that the writing contain a price term. While the letter from Pete to Jackie does states how much the Baileys were to pay for the Rivah House, it does not state how much Jackie was to pay, and thus it would not satisfy the statute of frauds under the traditional common law approach. However, as stated above, the writing satisfied the statute in Virginia.

Relief - the Court should award Jackie breach of contract damages. As discussed in part (b), specific performance for a contract is only available if such performance is feasible. While specific performance is available for sales of real estate, because real property is unique, this is only true if it is still in the possession of the seller and it has not been conveyed to a BFP. In this case, were The Rivah House still in Pete's possession, specific performance would be appropriate. However, as Pete has sold the property to a BFP for fair market value, specific performance is not available and money damages for breach of contract are appropriate.

While the facts do not provide enough information to exactly calculate the money damages, under contract law, the damages should be the fair market value of the property minus the contract price. In this case, the fair market value could be considered $438,500, as this is what the property sold for. As this is $8,000 more than the price of the contract between Jackie and Pete, Jackie's award will likely be within the realm of $8,000.