6) Contracts

Question 1

SOF essential terms for a property transfer

Answer 1

1) description of the property
2) the parties
3) price
4) any conditions of price or payment

Question 2

oral ks for sale of land: 2 ways to enforce

Answer 2

1) part-performance (see the spl land k rule)

2) estoppel, inc equitable and promissory

Question 3

equitable estoppel: def

Answer 3

based on an act or representation

Question 4

promissory estoppel: def

Answer 4

based on a promise

Question 5

equitable conversion: rule

Answer 5

when a land-sale k is formed (BEFORE closing), there is a bifurcation of title.

Equitable title passes to buyer

Legal title remains with seller until closing date

Question 6

majority approach: risk of loss before closing

Answer 6

risk of loss follows equitable title, so risk is on BUYER if lost before closing

Question 7

minority approach: risk of loss before closing

Answer 7

Uniform Vendor and Purchaser Risk Act

risk of loss remains with seller until legal title or possession of property has passed to the buyer (ie until closing)

Question 8

marketable title: rule

Answer 8

included in every land sale k unless expressly stated otherwise

BUT only manifests itself at the time of closing. Seller dnn to have marketable title any time prior to closing.

(majority: ok for seller to use proceeds of sale to remove cloud on title, ex. pay a mortgage)

Question 9

marketable title: def

Answer 9

title reasoanbly free from defects in both fact and law

exs. of defects that would make title unmarketable
1) unpaid mortgage/lien
2) covenant or easement restricting use of land
3) title acquired by AP (and hasn’t been quieted)
4) existing condition on the land that violates a zoning ordinance

Question 10

merger: rule

Answer 10

covenants in a sale k, including marketable title, merge into deed at closing.

Result: buyer can’t assert covenant of marketable title/etc after closing – must sue on the deed (and success of that will depend on what kind of deed he had)

Question 11

merger: exception

Answer 11

collateral matters do not merge into the deed (ex. agreement to remove junk car)

Question 12

deeds: Kinds

Answer 12

1) quitclaim
2) general warranty
3) special warranty

Question 13

quitclaim deed: def + result

Answer 13

as-is deed, no warranties or covenants, seller just conveys whatever interest he has

buyer can’t sue!

Question 14

general warranty; deed: Def + result

Answer 14

contains all 6 covenants of title that cover all of the period prior to seller sellign to buyer (inc. that no defects in chain of title)

buyer can sue on one of the covenants in the deed

Question 15

special warranty deed: def + result

Answer 15

many contain some or all of the covenants, may limit liability to period of GRANTOR’S ownership of land

can sue under whatever covenants the deed has, only

Question 16

covenants in the general warranty deed (list)

Answer 16

present:

1) seisin
2) right to convey
3) encumbrances

future:

4) quiet enjoyment
5) warranty
6) further assurances

Question 17

covenant of seisin: def

Answer 17

promise by grantor that grantor actually owns the property

Question 18

covenant of right to convey: def

Answer 18

promise by grantor that he has the power to convey the property

Question 19

covenant of encumbrances; def

Answer 19

promise by the grantor that there are no encumbrances, visible or invisible, on the property

Question 20

present covenants; result

Answer 20

does not run w land – can only be breached at the time of closing (but closing must happen)

Question 21

future covenants: result

Answer 21

run w the land, breach can be at time of closing, or after

Question 22

covenant of quiet enjoyment: def

Answer 22

promise by grantor that grantee will not be disturbed by a 3rd party asserting a valid claim to the land

Question 23

covenant of warranty: def

Answer 23

promise by the grantor that they will defend the grantee against any 3rd party claim

Question 24

covenant of further assurances; def

Answer 24

promise by grantor that he will do everything reasonably necessary to perfect the grantee’s title

Question 25

fitness + suitability of residential homes (tort)

Answer 25

there is duty to disclose material latent defects if seller knows about them but not readily observable and not known to buyer

applies to commercial builders/new homes
some states: old homes too

Question 26

implied warranty of quality (torts)

Answer 26

applies to new or remodeled homes by builders + developers, covers significant latent defects (must be discovered w/in reasonable time after construction or remodeling)

–not commercial structures