Land Sale Contract Flashcards
Deed SoF requirements
Need not satisfy the SoF, but must be in writing, signed by grantor, contain description of property, and identify the grantee.
Must also contain words of transfer.
Land sale K SoF requirements
In writing, signed by party to be charged, contains all essential terms (parties, property description, terms of price/payment)
Part performance SoF exception
Buyer takes possession of land, buyer remits all or part of purchase price, and/or buyer makes substantial improvements (most juris require at least two acts).
Detrimental reliance SoF exception
Specific performance permitted when party seeking enforcement has reasonably relied on K and would suffer hardship.
Admission SoF exception
Party admits to the existence of a contract under oath.
Marketable title
Title free from defects or unreasonable risk of litigation.
No marketable title at closing
Buyer can rescind/recover out-of-pocket and earnest money payments, sue for breach, or sue for specific performance with an abatement of purchase price.
Time of the essence
Not enforced unless part of the K.
Party failing to perform on closing date still in breach.
Implied warranty of fitness
Only for new homes. Warrants use of adequate materials and workmanship.
Includes latent construction defects.
Duty to disclose defects
Applicable for all homes.
Seller must disclose all known material physical defects not readily observable.
Tender of performance
Concurrent conditions. If one party repudiates, then non-repudiating party excused, BUT must give time to cure title defect.
Merger
Land sales K obligations (e.g., duty to deliver marketable title) merge into deed upon delivery unless parties intend otherwise.
Damages for breach of land sale K
Difference between K price and market value.
Some jurisdictions limited to buyer’s out-of-pocket expenses if seller is unable to deliver marketable title but acted in good faith.
Buyer’s deposit as liquidated damages
Generally, deposits less than 10% of the purchase price are reasonable liquidated damages.
Courts may consider factors relating to the transaction or refuse to enforce liquidated-damages clauses when the seller suffers no actual loss.
When K is silent, seller usually allowed to retain the deposit.
Equitable conversion
Seller’s interest converted by K into interest in proceeds of sale, not in the real property, once the K is signed.
Buyer is owner of land subject to the condition he pays the contract price at closing, but before closing, buyer bears risk of loss.
