Parties to all types of contracts must remain wary of the statute of frauds when drafting, as agreements may be held unenforceable due to inadequate descriptions of property. In 2012, both the Fifth Circuit and the Dallas Court of Appeals heard cases involving this issue.
An instrument that conveys an interest in real property in Texas is subject to the Statute of Frauds. To satisfy the Statute of Frauds, the instrument must, among other things, identify the property to be conveyed with reasonable certainty. In a 1972 case, Morrow v. Shotwell, the Texas Supreme Court said it this way:
The rule by which to test the sufficiency of the description is so well settled at this point in our judicial history, and by such a long series of decisions by this court, as almost to compel repetition by rote: To be sufficient, the writing must furnish…the means or data by which the land to be conveyed may be identified with reasonable certainty.
However, “reasonable certainty” is not a bright-line standard.
In May v. Buck, a letter agreement identified property to be conveyed as a “100 acre spacing centered around the David Morris Gas Unit #1.” The court reasoned that the description gave rise to “several possible configurations of tracts.” With no information regarding shape or boundaries, the Appellants contention that the description was for a rectangle surrounding the well was struck down when the Appellant admitted that either a square or a halo would also be properly “centered”. The Court of Appeals of Texas, Dallas, found the description failed to satisfy the Statute of Frauds.
In Coe v. Chesapeake Exploration, the conveyance at issue was for “certain oil and gas leases located in Harrison County, Texas…such leases being shown in the map attached hereto as Exhibit “A””. While other Texas courts had found similar descriptions in separate cases to be inadequate, and Chesapeake relied on these rulings in their appeal, the Coe court informed Chesapeake that Texas courts had not yet established whether this exact language satisfied the statute of frauds. The court then identified a central motivation for the “reasonable certainty” requirement was to “avoid instances in which a court enforces the sale of property that the seller did not intend to convey or the buyer did not intend to purchase.” After stating that metes and bounds descriptions are not the only proper way to identify property, the court relied on a “recital of ownership” standard, which is a means of identifying the property to be conveyed by identifying the person who owns the property. Under this theory, if it can be proven that a grantor owns only a single tract of property which matches the description of that to be conveyed OR the grantor is conveying all of his property in a specific area described, the risk of improper identification is eliminated and the statute of frauds is satisfied. In Coe, since in the conveyance in question the grantor transferred all of his rights, title and interests in the areas described on Exhibit “A”, the Fifth Circuit found the description adequate.
Although Texas courts have shown the willingness to void conveyances based on land description discrepancies, they have also admitted “reasonable certainty” may be achieved through different means of identification. A drafter must take care so as to ensure the description maximizes clarity, accuracy, and precision so the only property able to match the description is the one to be conveyed.
- Casey Ragan, Thompson & Knight LLP