It’s the Law: Are you dealing one party or two?

Q: I made an offer to purchase some property. The husband and wife owners signed the contract, but made changes. The husband brought me the contract. I made additional changes and the husband and I both signed it. Now, the sellers refuse to close. Can I sue for specific performance?

A: Suit for specific performance is a remedy for breach of a real estate contract in Florida. In that action, the plaintiff seeks a court order compelling the other party to comply with terms of the contract. A prerequisite to successful prosecution of a specific performance action is a valid and binding contract.

Your limited recitation of facts does not confirm you have a binding contract. The last offer made in connection with this property included changes you made when the husband brought you the contract document. Only the husband signed the contract after those changes. Since there are two owners of this property, it does not appear that you have a contract under which you could force the owners to sell.

The actual facts of your situation will be important. If the husband also signed on behalf of his wife, the contract might be binding. For the contract to binding, you will have to show that the husband had authority to sign. If the husband did not have authority, you will need to show that the husband had implied authority based upon words and conduct of his wife.

Alternatively, you might still have a binding contract if you can show that the wife created an appearance of authority for the husband to act on her behalf. That is known as apparent authority. Apparent authority will exist if you can show that the wife made some statement or affirmed that the husband had authorization to act for her, that you relied on that representation in good faith and that you entered the contract based upon that reliance and that failure to enforce the contract would cause you damage. Implied authority, on the other hand, would generally require showing that the husband had acted on behalf of the wife in similar transactions with you. In either case, proof may be difficult.

Florida cases are illustrative. In the case of Dougherty v. Ricci, husband and wife signed an offer to sell and gave it to the buyers’ attorney. The buyers’ attorney made a counter offer which was accepted by the husband. The sellers sued the buyers. The court held that there was no valid contract and the husband did not have apparent authority to act on behalf of his wife. The court also held that there was no evidence the buyers’ attorney had authorization to execute the contract on behalf of the buyers. The buyers were trying to get out of the deal and the court granted their request to dismiss.

In Falkner v. Pastrano the buyers sued for it appears specific performance. The sellers were married, but the wife did not sign the contract. The title company supposedly disbursed all funds, but it is unclear if a closing took place. In any event, the wife did not endorse the proceeds check. During the course of the transaction, the buyers took possession of and improved the property.

The appellate court did not decide the case, but ordered it returned to the trial court for trial. The court pointed out that if it was determined that the husband had authority as the wife’s agent, the contract would be binding. If not, the contract was not binding but the buyers would be entitled to equitable reimbursement for their expenses. Equitable reimbursement would be levied only against the interest of the husband.

In the case of Hughes v. Russell, a contract was prepared with a husband and wife as purchasers. Only the wife signed the contract. The purchasing couple changed their mind and attempted to cancel the transaction. The court held that the contract was binding on the wife, because the wife could enter the contract alone, even though her husband had initially contemplated being involved in the purchase.

The facts of each case have a direct impact on the outcome. I suggest you meet with an experienced attorney to discuss all of the facts and circumstances involved in your case. It is the interplay of facts and law that will determine the outcome.

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William G. Morris is an attorney with offices at 247 North Collier Boulevard on Marco Island, Florida. His practice covers a broad range of subjects, including civil litigation, real estate, business and corporate law, estate planning and probate, domestic relations and contracts. He writes this column periodically with respect to legal matters that frequently affect non-lawyers. The information contained in this column is not intended as legal advice and, of necessity, is generalized. For questions about specific circumstances, the reader should consult a qualified attorney. Questions for this column can be sent to: William G. Morris, e-mail: wgmorrislaw@embarqmail.com or by fax, (239) 642-0722. Other articles of interest can be viewed at wgmorris.com.

© 2008 marconews.com. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

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