Sale of land - Agreement of purchase and sale - Doctrine of part performance - Remedies - Specific performance

Law360 Canada ( April 25, 2025, 1:30 PM EDT) -- Appeal by Appellant from the order for specific performance of an oral agreement for the sale of land. The Respondent sought to purchase the lot from the Appellant to combine it with the adjacent property it already owned for commercial development. The parties reached a binding oral agreement on essential terms, including a purchase price of $4 million, with a closing date on or before the agreed date. However, no formal written agreement was signed at that time due to the Appellant’s preference to finalize it at closing. After the oral agreement, both parties engaged lawyers to facilitate the closing process. The Respondent’s lawyer requested various documents and provided a draft agreement of purchase and sale while the Appellant’s lawyer confirmed the transaction and provided draft documents to be executed at closing. Despite these efforts, the Appellant refused to close the transaction on the agreed date without legal justification. The trial judge found that the Appellant’s refusal to close was unjustified and that the doctrine of part performance applied, as the Respondent had acted to its detriment by performing its obligations under the oral agreement, making it inequitable for the Appellant to rely on the Statute of Frauds to avoid enforcement. The Appellant argued that the detrimental reliance aspect of the doctrine was not satisfied, as the Respondent’s actions did not constitute detriment under the sale agreement. The Appellant contended that the Respondent’s sole obligation was to pay the purchase price, and since the tendered payment was refused, no detriment occurred. The Appellant also claimed that other preparatory actions were insufficient to meet the requirements of the doctrine....
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