Also known as: oral leases · parol lease · unwritten lease
Written by attorneys — see sources below.
A lease agreement formed without a signed writing. The agreement creates a valid landlord-tenant relationship when its stated duration does not exceed the maximum term permitted by the controlling Statute of Frauds.
Orbit Communications verbally offered Odyssey Logistics use of a corner warehouse bay and adjacent office for a fixed monthly rent beginning the following month and lasting exactly one year. Odyssey took possession on the agreed date and paid the rent each month. When Orbit later sought to end the arrangement early, Odyssey could enforce the full one-year term because the oral agreement fell within the period allowed without a writing.
Gail orally agreed during a phone call to let Elm Vessel tie its barge to her dock and store equipment for two shipping seasons in exchange for monthly payments. Elm Vessel took immediate possession and made the payments. When Gail later attempted to revoke permission by claiming the lack of a writing invalidated the deal, the court examined whether the oral understanding created an enforceable tenancy measured by the seasonal term.
In January 1972 Mary V. Nowling Elliott, a simple elderly woman who could neither read nor write, owned an undivided one-fifth interest in the minerals underlying a seventy-five acre tract of land. B.G. Russell offered to buy her entire interest, but she refused and instead orally agreed to sell him two of the thirteen to fifteen mineral acres she owned for $3300.00. Russell prepared a mineral deed that instead conveyed her entire one-fifth interest in the minerals under the seventy-five acres. Elliott's daughter, who lived with her and could read and write, reviewed the deed but did not understand it and advised that it was probably all right. Several days later Russell told Elliott he had made a mistake and offered her $15,000 for the interest conveyed, but she refused and insisted on reconveyance of the portion she had not intended to sell. On February 16, 1972 Russell and his wife purported to reconvey to Elliott the thirteen seventy-fifths interest of which she had been defrauded. However on February 11, 1972 Russell had already conveyed a substantial portion of the same mineral rights to C.P. McClelland, who later conveyed those rights to respondents Love, Harris, and Carpenter. Elliott remained unaware of the Russell-McClelland transaction and subsequent conveyances until October 1973, when a title search conducted in connection with her attempt to sell more mineral rights revealed them. She then brought an action seeking cancellation of the original deed. The trial court found that by trick and fraud Elliott was induced to sign a conveyance other than the one she intended, that there was no lawful delivery, and that the instrument was void, with Elliott free of negligence given her lack of education and age. On appeal the district court reversed, characterizing the central question as whether the deed was void at law or merely voidable in equity. The district court implicitly treated the deed as voidable, making available the defenses of laches and bona fide purchaser status. The Supreme Court granted certiorari to review the decision on the ground that it conflicted with a decision of another district court of appeal.
View caseAn oral lease creates a valid landlord-tenant relationship when its duration does not exceed the period specified by the controlling Statute of Frauds. In most jurisdictions that period is one year. Once the tenant takes possession and pays rent, the agreement ripens into an enforceable tenancy for the agreed term.
Supporting sources
A three-month oral lease does not require a writing. The Statute of Frauds applies only to leases longer than one year in most jurisdictions. The parties' agreement on premises, rent, and a term shorter than one year is sufficient to form an enforceable term-of-years tenancy.
Supporting sources
Substantial performance clearly referable to the long-term lease can make the full oral term enforceable despite the Statute of Frauds. Permanent, lease-specific improvements such as custom cranes or reinforced flooring, combined with rent payments accepted by the landlord, satisfy the referability requirement and support enforcement of the stated duration.
Supporting sources
Part performance overcomes the Statute of Frauds when the tenant's actions are substantial, clearly referable to the alleged long-term lease, and accepted by the landlord. Possession plus rent payments alone usually creates only a periodic tenancy, but added irreversible improvements tailored to the promised term allow enforcement of the full duration.
Supporting sources