By Matthew L. Worsham, LL.M, and Melissa C. Steen
Personal representatives have the unenviable task of determining whether a contract is enforceable on the estate, if it expired along with the decedent, or if it is a contract to make a will.
“The appropriate test to determine if a contract was intended to survive the death of one of the contracting parties where the contract is otherwise silent on the issue, is whether the personal representative may perform as fully and as well as the decedent might have.” Bloom v. K & K Pipe and Supply Co., Inc., 390 So. 2d 770, 773 (Fla. 4th DCA 1980). Accordingly, a personal representative can properly refuse to perform a decedent’s contract when it is “personal” to the decedent. Id. The contract is “personal” if it only contemplates the personal performance of the decedent, such as a personal services contract. Id. In Bloom, the Court determined that a non-compete agreement was personal to the decedent and not enforceable. Id. The Third District Court of Appeals determined that a lease extension agreement that specified the decedent was personal and not enforceable by the personal representative. Frankel v. Bernstein, 334 So. 2d 37, 39 (Fla. 3d DCA 1976).
The personal representative has a duty to carry out the decedent’s non-personal contracts and, if they fail to do so, they may be compelled to pay damages with the assets in their hands. Frissel v. Nichols, 114 So. 431, 434 (Fla. 1927). In Gunderson v. School District of Hillsborough County, the Court determined that a pre-death settlement agreement with the decedent’s employer was enforceable by the personal representative. 937 So. 2d 777, 780 (Fla. 1st DCA 2006). Because the settlement agreement’s performance could statutorily be performed by the personal representative, the contract was not personal to the decedent and thereby enforceable. Id.
When a person intends a contract to survive death, they run the risk of accidentally making a contract to create a will under section 732.701, Florida Statutes. A written promise to leave money to an educational institution was deemed to be a contract to make a will and was not executed with the necessary formalities. See Talmudical Academy of Baltimore v. Harris, 238 So. 2d 161, 161-62 (Fla. 3d DCA 1970). An oral contract to care for the decedent in exchange for being named as the principal beneficiary of the estate was considered a contract to make a will and invalid for failing to be in writing and having two witnesses. Renfro v. Dodge, 520 So. 2d 690 (Fla. 4th DCA 1988).
When drafting contracts for your clients, practitioners should be aware of these general rules, especially when drafting contracts that may be later deemed invalid under section 732.701, Florida Statutes.
© 2023 This article was originally published in the November 2023 SideBar, the newsletter of the Martin County Bar Association.