Real Estate Transfer

Question 1

Damages

Answer 1

Seller may sue for the price only if the seller is unable after reasonable effort to resell it or the circumstances indicate that the effort be fruitless

Question 2

Centex

Answer 2

P constructed a condo and D entered into a contract to purchase. Put money down and signed K and sent check for down payment. D decided not to buy and canceled check.

Rule: specific performance should no longer be automatically available to a vendor of real estate but should be confined to instances where a vendor will suffer an economic injury which his remedy at law will be adequate.

Application: the condo was not special or unique. It was more efficient for the internal real estate office to resell than to go through with the purchase.

Question 3

Risk of loss

Answer 3

What happens if one party dies?

1. Cancel contract (common law)
2. Equity treat as done that which ought to be done…specific performance. Since the vendeee acquires equitable ownership of land once K is signed, the risk of loss shifts to him even if vendee never takes possession

Question 4

Ashmore:

Answer 4

P agreed to purchase property from D, inclusive of all buildings, driveways, construction for $20K. Fire before closing but covered by insurance by the seller for $10L.

Does the seller bear the risk of loss? Yes, court doesn’t follow arbitrary rules of equitable conversion. Follows mass rule seller bears the risk of loss until closing. If K is executed but before deed delivered, K is unenforceable, and purchaser may cancel.

Question 5

Brush Grocery

Answer 5

In Brush the buyer was leasing the property and exercised option to buy. Couldn’t agree on price and vacated. Hail storm caused $60K of damages. Court determined loss was on the seller because buyer was not in possession. Court determined loss was on the seller because buyer not in possession. Buyer had to pay purchase price - $60K damages.

Question 6

Skendzel

Answer 6

Chef entered into contract to buy restaurant. Entered into land sale contract. No third party. Provision that vendor had the right to terminate contract if K breached. Vendor accepted inconsistent payments.

Rule: Under Indiana law, judicial foreclosure is the preferred remedy for enforcement of vendor’s rights under a land contract unless the vendee had acquired so little equitable interest in the subject property that forfeiture would be unfair.

D already paid $21K, over half the purchase price. Forfeiture inconsistent with principles of fairness and equity. Seller waived strict compliance with provisions by accepting overdue payments.

Judicial foreclosure appropriate so vendee could at least get her money back.

Question 7

Schipper

Answer 7

A builder of of news homes forgot to add mixer to hot water. Owners leased home to another. Baby got severe burns. Manufactuere was not liable because it included warning. D argued baby had no privity with builder

Legal theories: negligence, defective product, implied warranty of fitness

Rule: Law should be based on current concepts of what is right and just and the judiciary should be alert to the never-ending need for keeping its common law principles abreast of the time.

Consider remodeling house, old home, rentals,