Representation Agreement Signed by Property Owner That Includes or Contains Appropriate Provisions To Include all Terms Essential to a Land Sale Contract Does not Offend the Statute of Frauds

The Supreme Court of Idaho in Wakelam v. Hagood, 151 Idaho 688, 263 P.3d 742 (Idaho, 2011) held that an auctioneer’s representation agreement that was signed by the land owner, which included appropriate provisions to include all terms essential to land contract complies with the Statute of Frauds.  The Supreme Court stated that “[a] writing must contain all necessary “conditions, terms and descriptions” in order to comply with the statute of frauds.”  However, that does not require each and every term of a contract for the sale of land to be in writing itself.  An enforceable contract can be reached if the party to be charged agrees to a definite method for determining a particular provision, such as the purchase price. Id. at 693.

This case involved an action to enforce an auction sale.  The suit was brought by highest bidders, Wakelam and Ressler (“Plaintiffs”) against the property owner Haggod (“Defendant”).  The auction was conducted by auctioneers Bullock who advertised the said auction as an absolute auction with a variety of terms and conditions for bidders. Plaintiffs were the highest bidders who bidded in an amount less than $1 million. When the Defendant was approached to sign the purchase and sale agreements, he refused to sign it and claimed that he did not intend to sell the properties for less than $2 million.

The Defendant contended that the Representation Agreement and the documents generated during the auctions did not contain sufficient details to satisfy the statute of frauds requirements. Wakelam, 151 Idaho at 693. The district court agreed with Defendant, granting summary judgment in his favor. Id. The Plaintiff consequently appealed. 

On appeal, Plaintiffs pointed out that the Representation Agreement that was signed by the Defendant contained the critical terms for the property sale. Wakelam, 151 Idaho at 693. The remaining details of the sale such as the purchase price and the identity of buyer could be obtained from the other auction documents. Id. Therefore, all these documents taken together would be sufficient to comply with the statute of Frauds. Id.
In the present case, the Representation Agreement stated that the Defendant agrees to sell the property for a total price of “absolute sale @ auction.” Wakelam, 151 Idaho at 694. The absolute auction provisions make it clear that the purchase price and identity of the buyer will be established by the highest bid cast for each parcel at the auction. Id. It also includes provisions such as financing and brokerage. Id. Thus, the Representation Agreement, which contains these terms and allows the broker to advertise them, constitutes an offer to the world, particularly those attending the auction, to sell the property and specifies that the highest bidder for each parcel will be able to unconditionally accept the offer by casting the successful bid. Id.

The Supreme Court observed that “‘a contract must be complete, definite and certain in all its material terms, or contain provisions which are capable in themselves of being reduced to certainty.’” ( quoting Giacobbi Square v. PEK Corp., 105 Idaho 346, 348, 670 P.2d 51, 53 (1983)). Wakelam, 151 Idaho at 693. Therefore, a seller can agree that, rather than stating a definite purchase price, the land sale contract provide a definite method to determine the purchase price, such as being established by an appraiser, by arbitrators, or by the successful bidder at an absolute auction. Id. Also, the seller can agree to determine the identity of the purchaser by a definite method, for example, the highest bidder at an absolute auction. A sale of land is not taken outside the statute of frauds just because it involves an auction. Id.  However, the auction terms that the seller agreed in writing can be considered in determining whether the writing satisfies the statute of frauds. Id.

The Supreme Court found that the Defendant had signed the Representation Agreement, authorizing an absolute auction of his properties on the terms and conditions set forth in the Agreement.  Wakelam, 151 Idaho at 694. The Agreement also included all terms essential to a land sale contract. Id. Although the Representation Agreement did not specifically state the purchase price for any parcel or the name of the buyer or buyers who would submit the highest bid thereon, the agreement contained an appropriate provision for reducing those material terms to certainty. Id. For these reasons, the Representation Agreement did not offend the statute of frauds.