Beware of the Promises You Make

Some time ago, a client of mine signed an agreement to sell real estate that he co-owned with his wife. Unfortunately, he failed to consult with her beforehand. When she refused to go along with the sale, my client tried to get out of the deal by arguing that the purchase agreement was not signed by his wife. The buyer successfully sued to enforce the contract, and my client and his wife were compelled to complete the sale. My client learned the hard way that when he signed the purchase agreement, he made an implied promise to deliver the signature of his spouse – a promise on which the buyer was entitled to rely.

Essentially the same issue came up this past week, when different clients didn’t realize that the real estate purchase agreement signed by only the wife was binding on both of them. Happily, this time the sale is one that they are both eager to complete!

The Michigan Court of Appeals recently confirmed the proposition that a married couple can be held liable for a contract even when it is signed by only one of them. In a case involving a home improvement project, a married couple was found to be liable for the cost of the project even though only the husband had signed the contract. The lesson for all of us? If a contract involves real estate owned by a married couple, be sure both spouses are on board before anything is signed.

Please give us a call at (248) 477-6300 if you need guidance regarding a real estate transaction.