Florida District Court Holds Property Buyer's Emails With Online Auction Company Are Not An Enforceable Contract

Internet Commerce

On April 7, the U.S. District Court for the Middle District of Florida dismissed a property buyer’s breach of contract and specific performance claims based on emails from an online auction company, holding that the emails alone did not create an enforceable real estate sales contract. Rouse v. Nationstar Mortg., LLC, No. 14-497, 2014 WL 1365420 (M.D. Fla. Apr. 7, 2014). The buyer, who won an online auction to purchase a property, sued the seller after the seller determined it did not wish to proceed with the sale. The buyer alleged breach of contract and sought specific performance, arguing that an email he received from the online auction company confirming his winning bid for the property and a subsequent email from the auction company indicating that the seller agreed to the terms of the purchase agreement memorialize all of the essential terms of the sale. The court held that even if the auction company’s emails satisfy the writing requirement of the statute of frauds as proper electronically signed documents, the confirmation email specifically stated that the seller’s acceptance of the bid and the purchase of the property was contingent not only on the seller’s approval of the purchase, but also on the execution of the purchase agreement by the winning bidder. Because the purchaser offered no evidence that he executed the purchase agreement, the court dismissed without prejudice the buyer’s breach of contract and specific performance claims. The court dismissed with prejudice the buyer’s equitable estoppel claim, but declined to dismiss the buyer’s unjust enrichment claim to recoup costs associated with repairs the buyer made to the property between the time of the auction and the seller’s decision not to proceed with the sale. The court held that the latter claim is dependent upon the seller’s actual knowledge of the repairs, which cannot be determined at this stage.