## Facts

- Three couples agreed to buy three condominium units from a developer in Duck, North Carolina.
- Each sales contract included a condition that a repurchase agreement would be executed before closing on terms acceptable to the buyers.
- The buyers signed proposed repurchase agreements; the developer signed the sales contracts but did not sign the buyers’ repurchase forms.
- The developer later signed a different repurchase version that added a contingency tying repurchase obligations to a time-share conversion; the buyers rejected that added term.
- The developer’s attorney sent a letter stating he had been advised the developer would follow the “original” repurchase agreements (without the time-share contingency).
- The purchase closings occurred without any repurchase agreement executed by both sides.
- About three years later, the buyers demanded repurchase; the developer refused, and the buyers sued.
- A jury found a written repurchase contract existed and awarded roughly $825,000 to the buyers.
- The developer appealed, arguing the Statute of Frauds was not satisfied because it never signed the buyers’ repurchase agreement and its attorney lacked authority to bind it.

## Issues

1. Whether the evidence satisfied the Statute of Frauds requirement of a writing signed by the party to be charged (or a lawfully authorized agent) for a contract affecting interests in land.
2. Whether the developer’s attorney had actual authority to bind the developer to the buyers’ version of the repurchase agreement.
3. Whether the developer’s conduct created apparent authority for the attorney to bind the developer to the repurchase obligation.
4. Whether the jury’s finding of an enforceable written repurchase contract could stand given the lack of an authorized signature on the asserted terms.

## Decision

- The Fourth Circuit reversed the judgment for the buyers.
- The court held there was no enforceable written repurchase contract because the developer did not sign the repurchase agreement on the terms the buyers claimed.
- The court concluded the attorney’s letter did not satisfy the Statute of Frauds because the attorney lacked actual or apparent authority to execute or bind the developer to a repurchase contract.
- Because the Statute of Frauds was not met, the jury verdict enforcing the repurchase obligation could not stand.

## Legal Principles

- A contract involving the sale or repurchase of an interest in real property must be in writing and signed by the party to be charged or by an authorized agent to satisfy the Statute of Frauds.
- An attorney retained for a transaction may have authority to negotiate and communicate, but does not, by representation alone, have implied authority to execute a contract subject to Statute of Frauds formalities; specific authorization is required.
- Apparent authority must rest on manifestations by the principal to the third party; it cannot be established solely by the agent’s own statements or communications.
- Where the only signed writings reflect materially different terms (one version signed by buyers, a different version signed by seller), and no authorized signature bridges that gap, there is no signed written contract reflecting mutual assent.

## Conclusion

The court rejected enforcement of the claimed repurchase promise because the developer never signed the buyers’ repurchase terms and the attorney’s correspondence, absent proof of authority to bind the client, could not supply the Statute of Frauds signature required for a land-related repurchase contract.


Schafer v. Barrier Island Station, Inc., 946 F.2d 1075 (4th Cir. 1991)