Should a court enforce specific performance of a contract for the sale of real estate when one party alleges the agreement was made jokingly?

On December 20, 1952, W.O. Lucy and A.H. Zehmer were drinking at Zehmer's restaurant when Lucy offered to buy Zehmer's Ferguson farm for $50,000. Zehmer wrote an agreement on the back of a restaurant check, stating: "We hereby agree to sell to W. O. Lucy the Ferguson Farm complete for $50,000.00, title satisfactory to buyer." Both Zehmer and his wife signed the document. Lucy took the agreement seriously, arranged financing, and had the title examined.

When Lucy attempted to close the deal, Zehmer refused, claiming he was drunk at the time and the offer was made in jest. Lucy and his brother J.C. Lucy subsequently sued A.H. Zehmer and Ida S. Zehmer for specific performance of the contract to sell the Ferguson farm. Zehmer maintained that the entire interaction was a joke and not a genuine offer to sell the property.

The Lucys filed a suit for specific performance against the defendant in the Circuit Court of Dinwiddie County. The circuit court dismissed their bill, ruling that the Lucys had failed to establish their right to specific performance. Dissatisfied with this outcome, the Lucys subsequently appealed the decision to the Supreme Court of Virginia.

(Buchanan, J.)

Yes. Specific performance of a contract for the sale of real estate should be enforced even when one party alleges the agreement was made jokingly. The outward manifestations and conduct of the parties, not their unexpressed intentions, determine whether a valid contract has been formed. When one party's words and actions would reasonably lead the other party to believe a serious offer was being made and accepted, a binding contract results. The subjective, uncommunicated intent of one party to joke does not negate the objective appearance of mutual assent. Enforcing such contracts protects the reasonable expectations of parties who rely on apparent agreements made in good faith. To allow a party to avoid a contract by later claiming it was not serious would undermine the stability and predictability of business transactions. Specific performance is particularly appropriate for unique property like real estate, absent evidence of fraud, misrepresentation, or unequal bargaining power. The law looks to objective manifestations of intent, not secret reservations, to determine if a valid, enforceable agreement exists. Parties are held to the natural consequences of their words and conduct in the eyes of a reasonable person. To do otherwise would inject uncertainty into contract formation and enforcement.