Real estate contracts are required to be in writing, but there are exceptions where a verbal real estate contract could be binding. But first, for a verbal contract to have a chance at being binding in Florida, it must have all the elements of an enforceable contract:
(1) Offer – A buyer must make a genuine offer to a seller.
(2) Acceptance – Seller accepts the offer.
(3) Consideration – The price one party pays for the promise of another party. The obligation of buyer to pay seller for seller’s property is buyer’s consideration and the obligation of seller to deliver the property to buyer via signing a deed is seller’s consideration.
(4) Legality – The parties to the contract cannot agree to do something illegal.
(5) Capacity – The parties to the contract must be adults of sound mind. They cannot be minors or mentally incompetent.
(6) Meeting of the minds – The parties must intend to enter the contract and agree on the terms of the contract.
Even if a verbal contract has the above elements, it can only be binding in Florida if it meets two limited exceptions to the Statute of Frauds. The Statute of Frauds is a law that requires real estate contracts to be in writing. The two limited exceptions to the Statute of Frauds are (1) part performance and (2) complete performance:
(1) Part performance – The Supreme Court of Florida, in Miller v. Murray, 68 So.2d 594, 596 (Fla. 1953), identified the elements of part performance as follows:
- Buyer paid all or part of the consideration;
- Buyer is in possession of the property; and
- Buyer has made improvements to the property with consent of the seller or facts exist that would make the transaction a fraud on the buyer if it was not enforced.
In addition to satisfying the elements of part performance, the buyer also must establish the existence of an oral contract by “clear, definite and certain proof.” See Miller v. Gardner, 144 Fla. 339 (1940).
(2) Complete performance – If a verbal agreement has been fully performed by a party, then the verbal agreement is outside the Statute of Frauds. W.B.D., Inc. v. Howard Johnson Co., 382 So.2d 1323, 1327 (Fla. 1st DCA 1980).