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INDIANA COURT DETERMINES WRITTEN REAL ESTATE CONTRACT UNENFORCEABLE

The Indiana Court of Appeals recently decided a case involving a written real estate contract. Both parties to the real estate contract agreed that the contract did not adequately describe the portions of the property being conveyed. The enforceability of a contract in Indiana is determined by a law known as the Statute of Frauds.  In order for a contract for the sale of real estate to be enforceable, one of the requirements is that the agreement must be in writing and the writing must contain the essential terms of the deal.  The purpose of the Statute of Frauds is to prevent false claims for the purchase of real estate resulting in a battle of one person’s word against another.  The Statute of Frauds requires that all of the essential terms of the agreement be contained in the written document so that a court does not have to rely on one person’s word versus another in order to interpret the agreement.  

In this particular case, the real estate purchase agreement did not contain a sufficient description of the land being conveyed.  The description did not describe how many acres of the property were to be sold and did not adequately describe what portion of the property was to be sold.  The court determined that the written agreement was not specific enough and therefore the contract was unenforceable.  Buyers and sellers of real estate should keep in mind that just reducing their agreement to writing may not be enough in order for the agreement to be deemed enforceable in court.  The parties must also make sure that all of the essential terms of the agreement are contained in the document, including a specific description of the real estate being conveyed.