In order for any contract to be enforceable you need 5 things:
- The parties must have the legal capacity to enter into a contract
- They must intend creating legal relations
- The contractual terms must be certain
- There must be offer and acceptance
- There must be consideration.
For the sale of land or real property it was the case that a written note or memorandum was made which was signed by the person to be charged with the contract. Although this requirement was relaxed by reason of the equitable doctrine of part performance.
Doctrine of part performance
This doctrine held that an oral contract for the sale of land, where no note or memorandum existed, could be enforced by the party seeking to enforce the contract has partly performed his actions under the contract and the other party has acquiesced in those acts of part performance.
Land and Conveyancing Law Reform Act 2009
This Act changed the law by repealing the old Statute of Frauds (Ireland) Act, 1695 as follows:
Section 51.— (1) Subject to subsection (2), no action shall be brought to enforce any contract for the sale or other disposition of land unless the agreement on which such action is brought, or some memorandum or note of it, is in writing and signed by the person against whom the action is brought or that person’s authorised agent.
[SF 1695, s. 2]
(2) Subsection (1) does not affect the law relating to part performance or other equitable doctrines.
(3) For the avoidance of doubt, but subject to an express provision in the contract to the contrary, payment of a deposit in money or money’s worth is not necessary for an enforceable contract.
Memorandum/Note of Agreement
The following matters should be included in the memorandum
- The parties
- The property
- The consideration
- Any other provisions agreed between the parties
Where the conditions of common law and the Land and Conveyancing Law Reform Act 2009 are satisfied an enforceable contract for the sale of land (real property) comes into being. This type of contract is known as an ‘open contract’ because all the terms of the contract are not set out in the memorandum.
Closed contract
A closed contract, by contrast, is one in which the parties set out all the terms of the agreement in a formal agreement. It is the practice in Ireland that the standard form Contract for Sale produced by the Law Society of Ireland is used.
You can learn more about the standard form contract for sale here. This is the contract that will be used in property transactions in Ireland.