Business Law 11th Edition by Kenneth Clarkson,Roger LeRoy Miller,Gaylord Jentz,Frank Cross

Exercise 18

Stainbrook v. Low
Court of Appeals of Indiana, 2006. 842 N.E.2d 386.
• Background and Facts In April 2004, Howard Stainbrook agreed to sell to Trent Low forty acres of land in Jennings County, Indiana, for $45,000. Thirty-two of the acres were wooded and eight were tillable. Under the agreement, Low was to pay for a survey of the property and other costs, including a tax payment due in November. Low gave Stainbrook a check for $1,000 to show his intent to fulfill the contract. They agreed to close the deal on May 11, and Low made financial arrangements to meet his obligations. On May 8, a tractor rolled over on Stainbrook, and he died. Howard's son David became the executor of Stainbrook's estate. David asked Low to withdraw his offer to buy the forty acres. Low refused and filed a suit against David in an Indiana state court, seeking to enforce the contract. The court ordered specific performance. David appealed to a state intermediate appellate court, arguing, among other things, that his father's contract with Low was "ambiguous and inequitable."
VAIDIK, Judge.
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The Estate [David] * * * contends that Low failed to preserve the remedy of specific performance here because he failed to perform sufficiently under the Agreement. * * * [T]he Estate argues that "[i]n order to be entitled to specific performance, the claimant has the burden to prove full and complete performance on their part of the contract." Low * * * argues that specific performance was appropriate because he either substantially performed his obligations under the Agreement or offered to do so, and this, rather than full and complete performance, is all that is required to preserve a claim for specific performance.
We agree with Low. Because Low offered to perform his obligations under the Agreement, specific performance was a proper remedy.* * * [T]he Estate argues that Low is not entitled to the remedy of specific performance because he did not pay the November 2004 property taxes. Low, however,* * * offered to make the tax payment and the Estate refused his offer.* * *
The Estate also contends * * * that specific performance was inappropriate because Low failed to tender the purchase price listed in the Agreement and arrange for a survey of the land before the closing date.* * * [T]he Estate's argument assumes that a party may not be granted specific performance unless that party has fully and completely performed under the terms of the contract. On the contrary,* * * specific performance is an appropriate remedy to a party who has substantially performed under the terms of the contract. Regarding Low's payment of the purchase price, we note that Low * * * had obtained financing before the closing date, and there is nothing * * * to indicate that he was not prepared to meet his financial obligations at that time. Further, * * * shortly after Stainbrook's death, the Executor of the Estate requested that Low withdraw his offer, and Low declined to do so, indicating that he was prepared to go forward. Regarding Low's failure to order a land survey, the Estate presents no evidence to suggest that this matter, particularly in isolation, reaches the level of failure to perform under the Agreement, and we decline to sanction such a rule.* * * [Emphasis added.]
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The Estate finally argues that the trial court should not have awarded specific performance here because the Agreement between Low and Stainbrook was unfair. * * * [S]ince Low was twenty-two years old and Stainbrook was eighty-nine at the time of contract, and because the combined estimates of property and timber values was as high as $121,000.00 and Low and Stainbrook had agreed to a $45,000.00 purchase price, the Estate argues that the trial court should have found the contract to be unfair or unconscionable and to have found that Low would be unjustly enriched by its execution.* * *
* * * [T]he Estate stipulated at trial that Stainbrook was competent at the time of contract, and evidence was presented that Stainbrook consulted a lawyer regarding the Agreement and that he insisted upon several handwritten changes to the contract that benefited his own interests. We find no support for the Estate's contention that Stainbrook was anything less than a party entirely capable of entering into this Agreement, nor for its contention that the Agreement was unfair.
• Decision and Remedy The state intermediate appellate court held that specific performance was an appropriate remedy in this case and affirmed the lower court's order. The appellate court explained that a contracting party's substantial performance is sufficient to support a court's order for specific performance. Here, "Low both offered to perform and substantially performed his contractual obligations."
• The Ethical Dimension Should a party who seeks specific performance of a contract be required to prove that he or she has performed, substantially performed, or offered to perform his or her contract obligations Why or why not
• The Global Dimension Suppose that Stainbrook and Low had been citizens and residents of other countries. Would the location of the land that was the subject of their contract have been sufficient to support the Indiana state court's jurisdiction and award in this case Discuss.