Colorado § 38-10-108 - Contracts for interests in land - must be written.

§ 38-10-108. Contracts for interests in land - must be written.

Every contract for the leasing for a longer period than one year or for the sale of any lands or any interest in lands is void unless the contract or some note or memorandum thereof expressing the consideration is in writing and subscribed by the party by whom the lease or sale is to be made.

Source: R.S. p. 339, § 8. G.L. § 1258. G.S. § 1517. R.S. 08: § 2662. C.L. § 5107. CSA: C. 71, § 8. CRS 53: § 59-1-8. C.R.S. 1963: § 59-1-8.

ANNOTATION

I. General Consideration.

II. Leases.

III. Contracts for Sale of Interest in Land.

IV. Note or Memorandum.

V. Complete Performance and Part Performance.

I. GENERAL CONSIDERATION.

Law reviews. For article, "Collateral Effects of the Statute of Frauds", see 13 Rocky Mt. L. Rev. 233 (1941). For note, "The Effect of ‘Invalid’ Leases", see 22 Rocky Mt. L. Rev. 305 (1950). For article, "The Interest of Landowner and Lessee in Oil and Gas in Colorado", see 25 Rocky Mt. L. Rev. 117 (1953). For article, "Trusts and Estates", see 30 Dicta 435 (1953). For article, "One Year Review of Agency, Partnerships and Corporations", see 40 Den. L. Ctr. J. 123 (1963). For article, "Signatures on Documents Affecting Title to Colorado Real Property — Part III", see 12 Colo. Law. 447 (1983). For article, "Residential Tenancies, Lease to Eviction An Overview of Colorado Law", see 43 Colo. Law. 55 (May 2014). For article, "Enforcing Oral Contracts", see 50 Colo. Law. 41 (Jan. 2021).

Statute of frauds should operate as shield against fraud. Burnford v. Blanning, 189 Colo. 292, 540 P.2d 337 (1975).

Section is for protection of vendor and not vendee, and the vendee cannot take advantage of it. Colo. Lumber, Land, & Imp. Co. v. Dustin, 38 Colo. 398, 87 P. 1142 (1906); Garbarino v. Union Sav. & Loan Ass'n, 107 Colo. 140, 109 P.2d 638 (1941); Boyer v. Karakehian, 915 P.2d 1295 (Colo. 1996).

This section requires a contract for the sale of land or interest therein to be expressed in a writing signed by the selling or granting party, and such a contract must identify the parties to the transaction, the terms and conditions of the transaction, a description of the property, and the consideration. Luttgen v. Fischer, 107 P.3d 1152 (Colo. App. 2005).

When oral contract for land not considered void. An oral contract for the sale of land cannot be considered void so long as the vendor is willing to treat the contract as good; this rule applies where the vendee resists payment on a check given for the purchase price. Colo. Lumber, Land, & Imp. Co. v. Dustin, 38 Colo. 398, 87 P. 1142 (1906); Garbarino v. Union Sav. & Loan Ass'n, 107 Colo. 140, 109 P.2d 638 (1941); Houtchens v. United Bank of Colo. Springs, 797 P.2d 814 (Colo. App. 1990).

Where the oral contract is not void but voidable, a promise within the statute of frauds will serve as consideration for an enforceable promise by another. Colo. Lumber, Land, & Imp. Co. v. Dustin, 38 Colo. 398, 87 P. 1142 (1906); Garbarino v. Union Sav. & Loan Ass'n, 107 Colo. 140, 109 P.2d 638 (1941).

Statute of frauds furnishes rule of evidence, but not of pleading. Tucker v. Edwards, 7 Colo. 209, 3 P. 233 (1883); Garbanati v. Fassbinder, 15 Colo. 535, 25 P. 991 (1890); Ruth v. Smith, 29 Colo. 154, 68 P. 278 (1901).

Defense involves questions of fact and law. The defense of the statute of frauds involves questions of fact as well as law. Bushner v. Bushner, 134 Colo. 509, 307 P.2d 204 (1957).

Unenforceable contract of the statute cannot be made indirectly enforceable by promising to execute a sufficient memorandum or otherwise to satisfy the requirements of the statute. Rupp v. Hill, 149 Colo. 48, 367 P.2d 746 (1961).

Statute of frauds concerns making of contracts only; it does not apply to the matter of their revocation. Niernberg v. Feld, 131 Colo. 508, 283 P.2d 640 (1955).

Executory contracts may be rescinded by mutual consent of parties thereto. Niernberg v. Feld, 131 Colo. 508, 283 P.2d 640 (1955).

When parol gift of interest in realty deemed good in equity. A parol gift of an interest in real property is good in equity, as a rule, only when valuable improvements have been made in reliance on the gift, so that to refuse to enforce it is inequitable. Kendall v. Metroz, 65 Colo. 387, 176 P. 473 (1918).

Contract not evidenced by memorandum conveying title to omitted property. A written memorandum by the grantor agreeing to convey the legal title to his grantee who has purchased, paid for, and reduced to peaceable possession, property which by mistake was omitted from the original deed, does not evidence a contract for the sale of land within the meaning of this section. Ross v. Purse, 17 Colo. 24, 28 P. 473 (1891).

Grubstake agreements not within statute of frauds. Grubstake agreements may be either oral or written and are not within the statute of frauds. Smaller v. Leach, 136 Colo. 297, 316 P.2d 1030 (1957).

Statute does not prevent declaration of constructive trust nor does it prevent recovery of property delivered conditionally by one to himself and another as joint tenants in contemplation of marriage. In re Heinzman, 198 Colo. 36, 596 P.2d 61 (1979).

Estoppel as bar to statute of frauds defense. In order to estop vendors from asserting the statute of frauds as a defense, the vendee must have performed acts constituting substantial action or forbearance. Tripp v. Shelter Research Inc., 729 P.2d 1024 (Colo. App. 1986).

Estoppel not found. Tripp v. Shelter Research Inc., 729 P.2d 1024 (Colo. App. 1986).

A party making an oral promise respecting the title to real estate may not rely on the statute if the other party fails to assure that the oral agreement is reduced to writing because of the confidence engendered by the first party. The promisor will be treated in such case as a constructive trustee for the other party. Jarnagin v. Busby, Inc., 867 P.2d 63 (Colo. App. 1993).

In order to escape the bar of the statute of frauds, it was necessary for the plaintiffs to prove, among other things, that they reasonably reposed confidence and trust in the promisor at the time of the negotiations leading to the oral agreement at issue and that, but for such confidential relationship, such oral agreement would have been reduced to writing. Jarnagin v. Busby, Inc., 867 P.2d 63 (Colo. App. 1993).

Applied in Wolf v. Burke, 18 Colo. 264, 32 P. 427, 19 L.R.A. 792 (1893); Thomas Realty Co. v. Guthrie, 71 Colo. 98, 204 P. 330 (1922); Swaim v. Swanson, 118 Colo. 509, 197 P.2d 624 (1948); Payne v. Cumming, 136 Colo. 244, 315 P.2d 818 (1957); Hunt v. Pick, 240 F.2d 782 (10th Cir. 1957); Coulter v. Anderson, 144 Colo. 402, 357 P.2d 76 (1960); Dolton v. Capitol Fed. Sav. & Loan Ass'n, 642 P.2d 21 (Colo. App. 1981); Great Falls Props., Inc. v. Prof'l Group, Ltd., 649 P.2d 1082 (Colo. 1982); Nicol v. Nelson, 776 P.2d 1144 (Colo. App. 1989); Karakehian v. Boyer, 900 P.2d 1273 (Colo. App. 1994).

II. LEASES.

Verbal lease for year to begin in future valid. A verbal lease for the term of a year, to begin in the future, is valid. Sears v. Smith, 3 Colo. 287 (1877).

Lease of land for crop year not void. An oral lease of land for the crop year, made in June, 1943, where the crops to be planted would not mature until July or August, 1944, did not amount to a lease for a period longer than one year, and it is not void under this section. Northrup v. Nicklas, 115 Colo. 207, 171 P.2d 417 (1946).

Time between making lease and taking possession cannot be counted. The time between the making of the lease and the time when the lessee is entitled to possession thereunder cannot be counted in computing the year as that is no part of the term. Northrup v. Nicklas, 115 Colo. 207, 171 P.2d 417 (1946).

III. CONTRACTS FOR SALE OF INTEREST IN LAND.

Actual possession must be referable to contract. Actual possession in furtherance of an oral contract may be made the foundation for a decree of specific performance, but such possession must be referable to the contract. Rupp v. Hill, 149 Colo. 48, 367 P.2d 746 (1961).

Trier of facts determines whether possession referable. Whether possession is referable to an oral contract rests upon circumstances, and should be resolved by the trier of the facts. Rupp v. Hill, 149 Colo. 48, 367 P.2d 746 (1961).

Verbal agreements for profits and contracts for land may be independent. A verbal agreement to share the profits arising from the purchase and sale of real estate may be made independent of any contract for an interest in the land itself. Kayser v. Maugham, 8 Colo. 232, 6 P. 803 (1885); Von Trotha v. Bamberger, 15 Colo. 1, 24 P. 883 (1890).

Oral agreement for perpetual right-of-way constitutes easement. An oral agreement for a perpetual right-of-way over the premises of another constitutes an easement or interest in land and is within the statute of frauds. Whitsett v. Kershow, 4 Colo. 419 (1878); Ward v. Farwell, 6 Colo. 66 (1881); Stewart v. Stevens, 10 Colo. 440, 15 P. 786 (1887); Fetta v. Vandevier, 3 Colo. App. 419, 34 P. 168 (1893), aff'd, Vandevier v. Fetta, 20 Colo. 368, 38 P. 466 (1894); Laesch v. Morton, 38 Colo. 171, 87 P. 1081 (1906); Workman v. Stephenson, 26 Colo. App. 339, 144 P. 1126 (1914).

Agreement for joint benefit of several persons not within section. Agreement between two or more persons to explore the public domain and discover and locate lodes for the joint benefit of all is not within this section, and it is not necessary that it should be written. Murley v. Ennis, 2 Colo. 300 (1874); Meylette v. Brennan, 20 Colo. 242, 38 P. 75 (1894).

Statute inapplicable to extension of performance time of executing contract. The statute of frauds does not apply to an oral agreement to extend the time for performance of an executory contract. Poznik v. Urton & Co., 30 Colo. App. 475, 496 P.2d 1073 (1972), aff'd, 181 Colo. 15, 506 P.2d 741 (1973).

Retention right in mine requires writing. Where one enters upon a mine previously discovered, and to which the discoverer has lost his right by failing to make the development required by the law; from the moment of commencing the labor of development with the bona fide purpose to complete it, and so appropriate the mine, the party has a possession in fact, and for the time being a right to retain that possession, and this right is, perhaps, such an interest in land as cannot be contracted for or disposed of without writing. Murley v. Ennis, 2 Colo. 300 (1874).

Subsequent oral modification unenforceable. A contract for the sale of land required to be in writing cannot be validly changed or modified as to a material condition, by a subsequent oral agreement, without more, so as to make the original written agreement, as orally modified, an enforceable obligation. Burnford v. Blanning, 189 Colo. 292, 540 P.2d 337 (1975).

Exceptions to unenforceability of subsequent oral modification. Exceptions to general rule that contracts for sale of land cannot be modified by subsequent parol agreement include: (1) When subsequent oral agreement amounts to revocation of written contract; and (2) when party consents to, or requests postponement of, performance by other party which is for his benefit and other party has acted on such request or consent. Urton & Co. v. Poznik, 181 Colo. 15, 506 P.2d 741 (1973).

Contracts for the sale of land can be modified by subsequent oral agreement if a party consents to or requests a postponement of performance by the other party which is for the requesting party's benefit and the other party has acted thereon. Colo. Inv. Servs., Inc. v. Hager, 685 P.2d 1371 (Colo. App. 1984).

When oral agreement not violative of statute. Where an oral modification agreed to by the parties has been performed, a contract which affects interests in real property may be modified as to a material condition by a subsequent oral agreement without violating the statute of frauds. Discovery Land & Dev. Co. v. Colorado-Aspen Dev. Corp., 40 Colo. App. 292, 577 P.2d 1101 (1977).

IV. NOTE OR MEMORANDUM.

Required contents of "note or memorandum". The "note or memorandum" required upon sale of real estate must show on its face or by reference to other writings: (1) The names of the parties, vendor, and vendee; (2) the terms and conditions of the contract; (3) the interest or property affected; and (4) the consideration to be paid therefor. Eppich v. Clifford, 6 Colo. 493 (1883); Micheli v. Taylor, 114 Colo. 258, 159 P.2d 912 (1945).

Nexus required between writings. Where more than one writing is used to satisfy the requirements of the statute of frauds, some nexus between the writings must be shown. While the phrase "internal reference" is often used to describe the requisite nexus, it need not be in the form of express cross-references between the writings. Instead, the requirement may be satisfied by parol evidence where it is apparent that the memoranda referred to the same subject matter or transaction. Bennett v. Moring, 33 Colo. App. 390, 522 P.2d 741 (1974).

Business record qualifies as memorandum. "Church Roll and Record", a regular business record, although kept in a rather informal manner, qualifies as a memorandum capable of satisfying the statute of frauds. Bennett v. Moring, 33 Colo. App. 390, 522 P.2d 741 (1974).

V. COMPLETE PERFORMANCE AND PART PERFORMANCE.

Section is inapplicable when performance of contract is shown. Babcock v. Bouton, 85 Colo. 327, 275 P. 908 (1929); Rupp v. Hill, 149 Colo. 48, 367 P.2d 746 (1961); Ridgeway v. Pope, 163 Colo. 160, 430 P.2d 77 (1967).

An oral contract for a one-fourth interest in the water of a spring, based on a valuable consideration, and which is performed by both parties, except as to the expenses that may arise in the future, is such a complete performance on both sides as will remove the bar of the statute. Vandewark v. Widman, 79 Colo. 82, 243 P. 622 (1926).

Full performance of a parol contract respecting the construction of an irrigating ditch and the right-of-way therefor takes the case out of the operation of the statute of frauds. Tynon v. Despain, 22 Colo. 240, 43 P. 1039 (1896).

Part payment and partial performance complies with section. A written receipt given as part payment reciting balance due, together with partial performance, is sufficient to overcome claim that contract violated this section. Tolley v. Fritsinger, 150 Colo. 440, 374 P.2d 364 (1962).

Contracts enforceable where there is substantial part performance. Where there is substantial part performance, which would result in injustice, courts of equity will enforce contracts which otherwise might be unenforceable under the statute of frauds. Siler v. Inv. Sec. Co., 125 Colo. 438, 244 P.2d 877 (1952).

Payment of profits from jointly owned land partial performance. Where there is an accounting between parties when one party paid over half the profits from jointly owned land there is such partial performance of a contract conveying a one-half interest in land as would take the contract from under the statute. Bushner v. Bushner, 134 Colo. 509, 307 P.2d 204 (1957).

Money expended for labor and building materials sufficient part performance. Where persons expended from $1,200 to $1,500 in labor and materials in building their home on another's land in reliance on owner's consent, it is clearly apparent that there was sufficient part performance to overcome the defense of the statute of frauds. Zamboni v. Graham, 104 Colo. 23, 88 P.2d 98 (1939).

Part performance may take the place of a writing under the statute of frauds and will permit enforcement of an otherwise unenforceable oral contract. Walk v. Miller, 650 P.2d 1286 (Colo. App. 1981); Ralston Oil and Gas Co. v. July Corp., 719 P.2d 334 (Colo. App. 1985); L.U. Cattle Co. v. Wilson, 714 P.2d 1344 (Colo. App. 1986); A & R Co. v. Union Air Transp., Inc., 738 P.2d 73 (Colo. App. 1987).

Standards used in determining part performance. Part performance consists of performing something required by the contract, such as the payment of rent, plus the taking of possession by the tenant and the installation of trade fixtures or other similar equipment of a type that is indicative of a long-term tenancy. A & R Co. v. Union Air Transp., Inc., 738 P.2d 73 (Colo. App. 1987).

A party relying on part performance to defeat a defense based on the statute of frauds must show that the partial performance is more consistent with the terms of the contract than with some other arrangement, such as a month-to-month tenancy or a tenancy at will. A & R Co. v. Union Air Transp., Inc., 738 P.2d 73 (Colo. App. 1987).

Mere possession of property is not substantial part performance if possession may be attributed to some arrangement other than the one under the alleged oral agreement. A & R Co. v. Union Air Transp., Inc., 738 P.2d 73 (Colo. App. 1987).

In many cases where part performance has been allowed to defeat a statute of frauds defense, either a tenant or a putative owner has taken possession of the premises and made extensive improvements or expenditures in preparing to occupy the property in reliance on an oral agreement. A & R Co. v. Union Air Transp., Inc., 738 P.2d 73 (Colo. App. 1987).

Evidence insufficient to prove part performance. Walk v. Miller, 650 P.2d 1286 (Colo. App. 1981); Tripp v. Shelter Research Inc., 729 P.2d 1024 (Colo. App. 1986).