In Moore v Moore, an unpublished Michigan Court of Appeals opinion, father and son drew up a document entitled “Purchase Agreement” for a ten-acre parcel of land owned by the father. Son never signed the document. Son took possession, resided on the land for over 20 years, and conducted a business from the property. Relations broke down and father sued son to quiet title to the property (other claims were made as well, but this is a real property blog, so this summary only address the land contract issue). The trial court quieted title in the father. Son appealed and in the first appeal, the court of appeals reversed and remanded, holding that the purchase agreement was sufficient to satisfy the statute of frauds, but remanded to the trial court for further proceedings. After protracted additional proceedings, the trial court held that the document was a valid land contract, but that son had breached it. The trial court entered a judgment quieting title in the father and son again appealed.
The court of appeals affirmed, but held that the trial court had reached the right result for the wrong reason. The court of appeals analyzed the “purchase agreement” and found that it did not contain sufficient information to be a land contract. Although it identified the parties and the property, it did not provide payment amounts beyond the first year, and did not contain an interest rate past the first 7 years. The time, the amount of the payments, and the interest rate are all essential elements of a land contract. Finally, the son testified that he purposely did not sign the purchase agreement because he thought he would be inheriting the property. Contracts require both offer and acceptance; without the son accepting it, a valid contract was never formed.