Oregon Court of Appeals Affirms Mistake Exception in Real Estate Contract Disputes

The Oregon Court of Appeals recently affirmed that when there is a mistake in a deed transferring real property from one party to another, the contract between the two parties, and not the deed, should be used to determine what is actually transferred. In Frontgate Properties, LLC v. James Bennett, et al., Frontgate entered into a contract to purchase two parcels of land from Bennett. Because of a mistake by the title company that drafted the deed to transfer the property, the two specific lots listed in the contract were not listed on the deed. Typically, once a deed is signed the deed replaces the contract as the agreement between the parties. The Court ruled, however, that where there is a mistake in the deed, the contract is not replaced and the parties’ agreement as it appears in the contract should be effectuated.