Michelle owned a building which she orally contracted to sell to Colleen, who was to remove it from its concrete foundation, put it on skids, and drag...

This is
a complex legal issue because the resolution depends upon whether the building is ultimately
considered to be part of the real property or defined as chattel.

As your question implies, Michelle, the seller, has justified her repudiation of the
contract because she believes the contract to be for real estate, which brings into play the
Statute of Frauds (the "Statute"), enacted by most states. The Statute, among other
things, requires that a contract for the sale of real estate be written, not oral, and must
contain certain information, the sales price and remedies if one party fails to honor any of the
contract's terms. The Statute applies, of course, to real estate, not to other forms of
property.

In general, real estate is defined as land and any permanently
affixed structures on the land. Within the structures or on the land, there may be items that
qualify as chattel, a tangible thing (lawn decorations, animals, water
troughs) that is not affixed to the land, and fixtures (things like curtain
rods, built-in shelves, a central air conditioner) that are affixed permanently to a structure
which is itself affixed to the land.

In your example, the issue of whether
the Statute is applicable depends upon the status of the building that is to be removed and the
intentions of the parties. Clearly, both parties intend that the building be removed, which, in
Common Law, implies that the seller, at least, does not believe the building to be a permanent
part of the real estate or necessary to the real estate's value. If the building, then, is not
considered by the owner to be a permanent part of the real estate, the building could qualify as
chattel, and the sale of chattel is not governed by the Statute.

Two issues that need to be resolved still exist. If the building's removal causes
damage to the land, then it is likely to be considered a fixture and as a
fixture, it would be part of the real estate. If, however, its removal causes no damage to the
real estate, it may be considered chattel and therefore not subject to the
Statute. Let's assume that the building can be removed without damage to the underlying real
property.

Under most definitions of real property, a building on a property
is considered part of the real estate no matter how it is affixed--with the exception of
specifically-defined "mobile homes." To determine whether the building is real estate,
a fixture, or chattel, Common Law looks to an early Roman law--whatever is attached to the land
becomes part of the land--so the presumption of the law is that a building is either real estate
or a fixture, that is, affixed to the land.

But Common Law also looks closely
at the intent of the parties, especially if the intent is easily discernible as in this case.
Both parties obviously intend that the building be removed--in fact, whatever price Colleen is
paying reflects the price of the building, not the real estate, so the intent is clear on both
sides of this oral contract. If the intent is clear, and there are no other real estate issues
(mortgagee's objections, zoning or tax issues, public infrastructure, creation of blight because
the building is gone) that affect the sale, if this case went to court, Michelle would most
likely not succeed with the argument that the Statute of Frauds applies to this
transaction.

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