Mary verbally agrees to purchase Martha's cottage for $75,000 and gives her a deposit cheque for $7,500.Martha later sends her a letter thanking her for the cheque and confirming all the details of the contract.Mary later refuses to go through with the deal.

Question

Quizplus · Accepted Answer

Martha cannot sue Mary for specific performance because there was only a verbal agreement and no written contract. However, Martha is entitled to keep the deposit as compensation for Mary backing out of the deal. The fact that Martha sent a letter confirming the details of the contract does not change the fact that there was no written agreement.

Mary Verbally Agrees to Purchase Martha's Cottage for $75,000 and Gives