Ragosta v. Wilder – Case Brief
Ragosta v. Wilder, 156 Vt. 390, 592 A.2d 367 (Vt. 1991).
Facts: Ragosta (P) mailed an offer and check for $2,000 to Wilder (D) as a deposit for The Fork Shop. Wilder rejected Ragosta’s offer and returned the check, but offered to sell the property for a specified amount at any time prior to November 1, 1987 provided that Ragosta met him at a bank with the money and Wilder had not sold the property to another party.
Ragosta told Wilder that he accepted his offer and the parties arranged to complete the sale. On October 8th Wilder informed Ragosta that he would not sell him the property. Ragosta sued for specific performance and the trial court found for Ragosta, holding that Wilder could not revoke his offer because Ragosta had begun performance by arranging financing. Wilder appealed.
Issue: In order to keep a unilateral offer open, must the performance begun or tendered be part of the actual performance invited?
Holding and Rule: Yes. In order to keep a unilateral offer open, the performance begun or tendered must be part of the actual performance invited.
The court held that Wilder’s letter contained an offer to sell which could only be accepted by performance prior to the deadline, and a promise to keep the offer open unless Wilder had sold the property to another. Wilder received no consideration for these promises and his promise to keep the offer open was not enforceable. Absent equitable estoppel Wilder could revoke the offer at any time prior to Ragosta’s acceptance.
The court held that Ragosta’s efforts to obtain financing did not constitute consideration sufficient to keep the offer to sell open. To constitute consideration a performance or a return promise must be bargained for (Restatement (2d) Contracts 71(1)). A unilateral offer cannot be accepted by promising to perform.
What is begun or tendered must be part of the actual performance invited in order to create an option contract and preclude revocation under Restatement (2d) of Contracts 45. The court held that Ragosta merely engaged in preparation for performance and did not begin the performance actually invited.
The court held that the lower court was not justified in applying equitable estoppel. The party invoking equitable estoppel has the burden of establishing each of its elements. The court held that equitable estoppel was not applicable because there were no facts known to Wilder but unknown to Ragosta.
Rule for Applying Equitable Estoppel: The party to be estopped must know the facts, must either intend that his conduct be acted upon or the act must be such that the party asserting estoppel has a right to believe it is so intended, the party asserting estoppel must be ignorant of the true facts, and the party asserting estoppel must rely on the conduct of the other party to his detriment.
The court held that promissory estoppel is distinct and totally separate from part performance, and the trial court’s order might be appropriate under promissory estoppel under Restatement (2d) of Contracts 90.
Disposition: Reversed and Remanded. On remand the court was ordered to consider the case under promissory estoppel only and determine what remedy, if any, was necessary to prevent injustice.