Opinion ID: 1695896
Heading Depth: 2
Heading Rank: 2

Heading: Applying Contract Principles

Text: An oral contract, such as the one in this case, is subject to the basic requirements of contract law such as offer, acceptance, consideration and sufficient specification of essential terms. See W.R. Townsend Contracting, Inc. v. Jensen Civil Constr., Inc., 728 So.2d 297, 302 (Fla. 1st DCA 1999) (mentioning basic contract principles as applied to an oral contract claim). The fact that nonessential terms remain open is not fatal to an oral contract. See W.R. Townsend Contracting, Inc., 728 So.2d at 301; Winter Haven Citrus Growers Ass'n v. Campbell & Sons Fruit Co., 773 So.2d 96, 97 (Fla. 2d DCA 2000). Finally, a party who asserts an oral contract must prove its existence by a preponderance of the evidence. Batista v. Walter & Bernstein, P.A., 378 So.2d 1321, 1322 (Fla. 3d DCA 1980). Oral brokerage contracts, like other oral contracts, are valid and enforceable. See Edgar Realty & Assocs., Inc. v. Mobley, 513 So.2d 1350, 1351 (Fla. 1st DCA 1987) (holding that a real estate broker's allegations of an oral contract with prospective purchasers stated a cause of action); 7 Fla. Jur.2d Brokers § 5 (1997) (providing that a contract of employment between a broker and a principal may be oral or written); 12 Am.Jur.2d Brokers § 51 (1997) (same); cf. Futch v. Head, 511 So.2d 314, 317 (Fla. 1st DCA 1987) (holding that sufficient evidence existed of an enforceable oral commission agreement between a broker and a co-broker and sustaining the verdict). Applying these principles to brokerage commissions for condemnation of property, if the seller and the broker agreed to, and did, pursue condemnation as an acceptable substitute for a sale, then the broker should be entitled to a commission when the property is condemned. If, however, the seller specifically authorized the broker to pursue only a sale, then the broker would not be entitled to a commission for a condemnation. In this case, it is undisputed that a valid oral contract existed whereby, at least, McIver would act as broker to obtain the sale of Topsail, and would receive a two percent commission. Generally, where the parties acknowledge creation of a contract and the disagreement concerns their varying understandings about certain terms, such questions are properly submitted to a jury. See, e.g., Pan American Bancshares, Inc. v. Trask, 278 So.2d 313, 314 (Fla. 3d DCA 1973). The next issue is whether and how the parties to an oral contract can orally modify it. It is well established that the parties to a contract can discharge or modify the contract, however made or evidenced, through a subsequent agreement. Carolina Metal Prods. Corp. v. Larson, 389 F.2d 490 (5th Cir.1968); 17A Am. Jur.2d Contracts § 513 (1991) (stating that a contract may be superseded or modified by another contract); cf. H.I. Resorts, Inc. v. Touchton, 337 So.2d 854, 856 (Fla. 2d DCA 1976) (holding that the parol evidence rule did not bar introduction of evidence of a subsequent oral contract concerning the broker's right to a commission and modifying the written agreement); 7 Fla. Jur.2d Brokers § 55 (1997) (stating same). Whether the parties have validly modified a contract is usually a question of fact. See Kiwanis Club of Little Havana, Inc. v. de Kalafe, 723 So.2d 838, 841 (Fla. 3d DCA 1998) (holding that whether a contract has been modified by subsequent oral agreement or course of dealing is a question of fact for the jury); cf. Transammonia Export Corp. v. Conserv, Inc., 554 F.2d 719, 724 (5th Cir.1977) (holding that evidence regarding the existence of an oral contract and its subsequent modification supported the jury's verdict); Willamette-Western Corp. v. Lowry, 279 Or. 525, 568 P.2d 1339, 1341 (1977) (holding that the evidence was sufficient for the jury to find that an oral agreement existed and that it was not modified). Under Florida law, the parties' subsequent conduct also can modify the terms in a contract. In re General Plastics Corp., 158 B.R. 258 (Bankr.S.D.Fla. 1993); Danforth Orthopedic Brace & Limb, Inc. v. Florida Health Care Plan, Inc., 750 So.2d 774 (Fla. 5th DCA 2000); see also Lalow v. Codomo, 101 So.2d 390, 393 (Fla.1958) (noting that the actions of the parties may be considered as a means of determining the interpretation that they themselves have placed upon the contract). We note, however, that a party cannot modify a contract unilaterally. All the parties whose rights or responsibilities the modification affects must consent. See Binninger v. Hutchinson, 355 So.2d 863 (Fla. 1st DCA 1978); United Contractors, Inc. v. United Constr. Corp., 187 So.2d 695 (Fla. 2d DCA 1966). Moreover, the modification must be supported by proper consideration. See, e.g., Wilson v. Odom, 215 So.2d 37 (Fla. 1st DCA 1968). In this case, genuine issues of material fact remain about whether St. Joe and McIver modified the brokerage agreement to authorize McIver to pursue a State condemnation of the property as a viable alternative to a sale. Although St. Joe preferred to sell the property to the State and the State was interested in buying it, negotiations stalled on one crucial term: the price. According to McIver, as a way of breaking the impasse he suggested that St. Joe propose condemnation to the State. A condemnation would allow the parties to value the property based on its highest and best use, which would include a greater density (and therefore a higher value) than the density allowed by the current zoning. St. Joe authorized McIver to pursue condemnation, which he did. These facts, if proven at trial, would establish a modification of the oral brokerage agreement to include pursuit of condemnation as well as a sale. We therefore approve the result of the First District's decision, which was to reverse the summary judgment on the breach of contract count.