Sales Contract

Question 1

Contract Elements

Answer 1

1. must identify the parties
2. include words showing intent to buy or sell
3. specify the purchase price
4. adequately describe the property
   * contracts may only be enforceable agains signatories
   * must comply with statute of frauds

Question 2

Equitable Estoppel

Answer 2

1. justifiable reliance on an oral contract
2. serious injury will result
   * courts rarely grant this relief

Question 3

Marketable Title
(merchantability)

Answer 3

a title not subject to such reasonable doubt as would create a just apprehension of its validity to the mind of a reasonable prudent and intelligent person

Question 4

Encumbrances

Answer 4

anything that would keep you from having good merchantable title
ex. liens, unpaid taxes, mortgage, restrictive covenants(if violated)

Question 5

Duty to Disclose Defects

Answer 5

Traditional Rule: Caveat Emptor
Modern Rule: Seller must disclose defects (based on buyers ability to inspect) 
-peculiarity in knowledge of seller
-material impairs value of k
undiscoverable by reasonable buyer

Question 6

fraudulent misrepresentation

Answer 6

1. false statement of material fact by seller
2. known to the seller to be false
3. made with intent to induce the buyer to purchase
4. buyer justifiably relies on decision to purchase
5. to the buyers detriment or loss
   * waiver of duty must be clear and specific

Question 7

Defects that must be disclosed

Answer 7

structural problems
environmental/hazmat
known observable is a fact question

Question 8

Implied Warranty of Quality

Answer 8

• only covers latent defects not discoverable @time of purchase that surface later
• action must be brought in a reasonable non arbitrary time
• the standard of care for D is customary standard of care
• doesn’t apply to commercial construction

Question 9

Remedies for breach

Answer 9

• compensatory damages: loss of bargain rule (k price- market price at time of breach)
• Consequential Damages: natural and probable consequence of the breach
• Specific Performance: bc of uniqueness of land
• Retention of deposit: majority rule 10% is reasonable to retasin

Question 10

Liquidated Damages

Answer 10

1. future damages difficult or impossible to determine

2. @ time contract was signed damages were reasonable