Contracts for the Sale of Land

Question 1

Contracts for the Sale of Land

Answer 1

• Sales contract – traditional rule is that the real estate agent has fiduciary duty to the seller
• Fixtures – intended to become a permanent part of the land (versus chattel – removed; rug vs. carpeting example)
• Sales contract has conditions – usually for marketable title

Question 2

Marketable Title

Answer 2

• Arises out of concern about encumbrances on title (liens, easements, etc.) – claims of others
o Expectation at sale that the land is free of encumbrances, other than those which the buyer explicitly accepts
• Marketable title means – seller holds title + free from encumbrances (w/in reasonableness distinction
o Versus insurable title: less clean than marketable
• If seller can’t deliver marketable title, then buyer can withdraw

Question 3

• Tri-State Hotel Co. v. Sphinx Investment Co. – KS (1973)

Answer 3

o F: Sales K has guarantee of marketable title; P, seller to D, buyer. Small sliver of land actually not owned by P so D backs out (title issue); title could be established by adverse possession, but process for doing so would fall outside timeline set for the contract; P tries to enforce K anyway
o H: For D, buyer – title here is not marketable; marketable title was express requirement of the contract
 Even though P here has clear case for adverse possession to clear title (quiet title proceeding), it would not be done by the delivery date in the K – thus D retains right to cancel