## Facts

- Lawrence and Billy Ann Schwedes, California residents, sought to buy approximately 19.53 acres in Flathead County, Montana, owned by Dorlaine Romain and LeRoy Mudgett.
- Romain sent the Schwedes a detailed letter offering to sell the property for $60,000 cash, noting an existing contract balance that could be assumed and that the property was listed with realtors for $65,000 plus commission.
- Lawrence Schwedes telephoned Romain and stated he accepted the offer.
- Romain and Mudgett retained an attorney who obtained a title insurance commitment, prepared deeds, and set a closing date; the closing was later postponed.
- Before any closing occurred, Romain and Mudgett sold the property to third parties for a higher price.
- No written contract signed by the Schwedes was executed; the Schwedes paid no consideration, took no possession, and made no improvements to the property before the third-party sale.
- The Schwedes sued for specific performance or, alternatively, breach-of-contract damages; the district court granted summary judgment to Romain and Mudgett.

## Issues

1. Whether an enforceable contract for the sale of land was formed based on the sellers’ letter and the buyers’ telephone acceptance.
2. Whether, despite the statute of frauds, the alleged agreement could be enforced through part performance or equitable estoppel.

## Decision

- The Montana Supreme Court affirmed summary judgment for Romain and Mudgett.
- The court held the alleged land-sale agreement was unenforceable under the statute of frauds because it was not memorialized in a writing satisfying statutory requirements.
- The court held the Schwedes’ actions (including arranging financing and readiness to pay) were preparatory and did not constitute part performance.
- The court rejected reliance on the sellers’ attorney’s preparatory steps (title work, deed preparation, scheduling closing) as a substitute for buyers’ part performance.
- The court found no basis to estop the sellers from asserting the statute of frauds.

## Legal Principles

- Contracts for the sale of real property are subject to the statute of frauds and generally require a writing signed by the party to be charged to be enforceable.
- Preparatory conduct and willingness or readiness to perform (such as securing financing) are not, without more, “part performance” sufficient to avoid the statute of frauds.
- Part performance in real-property transactions requires acts that are unequivocally referable to the alleged contract; absence of payment, possession, or improvements weighs strongly against an exception.
- A seller’s preparatory steps toward closing (e.g., title commitments, drafting deeds) do not constitute the buyer’s part performance and do not, standing alone, support estoppel.
- Equitable estoppel requires a showing of inducement and detrimental reliance sufficient to make invocation of the statute of frauds inequitable.

## Conclusion

The court refused to enforce an alleged land-sale agreement lacking a statutorily sufficient writing, holding that the buyers’ preparations to purchase and the sellers’ closing preparations did not amount to part performance or justify estoppel; summary judgment for the sellers was affirmed.


Schwedes v. Romain, 179 Mont. 466, 587 P.2d 388 (Mont. 1978)