The Land Sale Contract Flashcards
Can Lenny compel specific performance if (1) Homer, looking to sell his car dealership, executed a valid sales contract w/ Lenny containing all essential terms, (2) before closing, Bart discovered the contract and truthfully told Lenny that Homer only had a life estate and that Bart has the future interest in fee simple, (3) Bart said he wouldn’t sell unless Homer paid him $25K, (4) Homer promised Lenny that Bart would agree b/c Homer would pay Bart the $25K in the future, (5) Lenny still refused to close?
No - the title wasn’t marketable b/c Homer breached the implied covenant of marketable title, which is implied in all land sales contracts, regardless of the deed created - he was obligated to deliver to Lenny marketable title but since Bart had a future interest and didn’t agree to the sale, Homer’s title is unmarketable and Lenny was free not to close - Homer as a life estate owner cannot provide marketable title if Bart, who holds the future interest doesn’t agree to the sale
Can an owner rescind a contract to sell a house if (1) entered into contract w/ buyer to close on 7/1, (2) on 7/1 buyer had unavoidable conflict, (3) buyer offer to close on 7/8 instead, (4) owner found another buyer paying more and wants to rescind?
No - time is not presumed to be of the essence - need either (1) specific term stated, (2) circumstances dictate, or (3) party gives notice - strict adherence otherwise is not required despite breach b/c buyer indicated a willingness and ability to perform shortly after, which would preclude a justified rescission
Does the seller owe the buyer for damages in breach of duty of disclosure if (1) buyer bought w/o inquiring any issues, (2) seller wasn’t aware of any issues, (3) seller delivered general warranty deed at closing, (4) buyer hired contractor who broke through walls and discovered mold all through interior, (5) in this state, seller has duty to disclose?
No - the seller had a duty to disclose all known material physical defects not readily observable to the buyer regardless if the buyer asks or not, but in this case seller was not aware of the black mold - there was no warranty breach b/c warranty deed only protects for defects in title, not condition of home
Can buyer enforce specific performance if (1) buyer bought a business from seller including building and land, (2) seller agreed to convey marketable title subject to covenants and zoning, (3) before closing, buyer learn business violates zoning laws but doesn’t care b/c confident it can get variance, (4) but seller refuses b/c of zoning issue?
Yes - real property requires specific performance b/c money inadequate b/c real property is unique; even though there is title defect, buyer can still waive the defect b/c it is the seller’s breach for buyer’s benefit; seller does not get to invoke conditions that were in place for the protection of the buyer
Between the buyer and the lender, who has priority if (1) buyer entered into contract but didn’t record, (2) before execution, seller borrowed from lender, (3) after execution, lender got judgment lien against seller and recorded, (4) seller deeded to buyer, (5) buyer recorded deed, (6) race notice jurisdiction?
Buyer - equitable conversion protects against lender b/c they became equitable owners after execution of the sales contract - lender got judgment after execution, which would not be enforceable b/c seller no longer owned the house; however recording won’t protect them b/c they had constructive notice since lender recorded before they recorded their deed
Can grantor enforce a right of first refusal if (1) grantor gave grantee big plot and kept small plot, (2) conveyance included mutual right of first refusal in writing to buy at FMV decided by panel of experts, (3) grantor sold small plot after grantee waived right to buy, (4) when grantee tried to sell big plot, didn’t let grantor buy at market price?
Yes - the right of first refusal was reasonable and complied w/ SoF as it was in writing + signed by grantor - it was reasonable b/c (1) the FMV was decided by experts so it was likely fair, and (2) mutual right of first refusal existed - likely harm would be outweighed by utility of restraint
Can grantor enforce a right of first refusal if (1) grantor sold house to buyer below FMV, (2) right of first refusal included in writing in deed, (3) right of first refusal required buyer + heirs, etc. wants to sell to non-family, must give grantor + heirs, etc. opportunity to buy, (4) seller sold house to non-family for 2x price?
No - right of first refusal is subject to RAP, and in this case, it may not vest or fail by the end of a life in being + 21Y
What must the condition of a title be for it to be considered marketable if (1) Quagmire refused to pay Brian at closing contending a title defect and (2) Brian brough action against Quagmire to buy the property?
Title must be free of unreasonable risk of litigation, including encumbrances, at time of closing - marketable title is implied in any real property contract unless specifically disclaimed - however, minor defects not creating unreasonable risk of litigation does not make title unmarketable
What is the most important issue in deciding whether Bart or the Owner wins if (1) Bart entered into a contract to buy a warehouse, (2) no requirement for type of deed, (3) no requirement for title to be free from defects, (4) no requirement for insurance, (5) owner let insurance lapse after contract execution, (6) before closing, warehouse destroyed, (7) Bart refused to pay contract price?
Depends on whether Oregon adopted Uniform Vendor Purchaser Risk Act - in most states, Bart has the risk of loss regardless if he takes possession of property but ones that adopted UVPR, risk of loss will fall on Owner b/c Bart didn’t have possession of the warehouse when it was destroyed
Is Cookie Kwan entitled to commission if (1) Ned hired Cookie to market his home, (2) Cookie was entitled to commission if found buyer who was willing, able and ready to buy according to Ned’s terms, (3) Cookie found Coach Roberts who was willing and able to pay Ned’s asking price, (4) Coach Roberts was trying to sell his own house so he asked for right to cancel if his home isn’t sold in 60d, (5) Ned refused the condition so no contract was entered into?
No - Coach Roberts was not ready and willing to buy Ned’s home - he was not ready and willing to meet Ned’s terms which required no condition for cancellation - it doesn’t matter though that there was no closing as long as had Ned and Coach Roberts entered into an enforceable contract, Cookie would have been due a commission
Can Homer enforce specific performance against Moe if (1) Homer entered into a contract to buy from Moe w/ (a) >100 acres, (b) >1,000 feet of frontage on highway, (c) location dimensions TBD, (d) $8K / acre, (2) Moe and Homer couldn’t agree to the exact parcel, (3) Moe repudiated the contract?
No - Homer can’t enforce a contract b/c there was an essential element of the exact parcel of land that required further agreement - SOF requires that Moe and Homer identify the land to be sold whereas they had yet to agree on the piece of land, making the contract unenforceable - however, price isn’t an issue b/c price / acre satisfies SOF
Can Homer enforce specific performance against Barney if (1) in April, Homer entered into a vaid contract for Barney to buy a building from Homer that would close in June, (2) contract complied w/ SOF but no provision for risk of loss, (3) in May, Homer accidentally set the building on fire during a bbq on the building, (4) Barney declared contract void and refused to pay purchase price?
No - normally equitable conversion would have put the risk of loss on Barney regardless of whether he took possession but here, Homer’s negligence caused the destruction, which triggers the exception for equitable conversion, thereby shifting risk of loss to him as the seller and allowing Barney to void the contract
Can Marge compel executor of Maude’s estate to convey her the land if (1) Maude devised land to Todd and all of her personal property to Rod, (2) after an argument with Todd, Maude decided to sell the land to Marge in a valid contract, (3) before closing, Maude was killed at the Springfield Speedway, (4) jurisdiction has anti-ademption statute?
Yes - Marge can enforce the contract and the proceeds will go to Todd b/c since Maude died after entering into a contract with Marge but before conveying her the property, Marge can compel Maude’s estate executor to honor the contract - at common law, Rod would have gotten the proceeds since this would have been personal property and Todd’s land would be adeemed but since Oregon has an anti-ademption statute, Todd would get the proceeds of the land
Can McPoyles sue Frank for breach of contract and compel specific performance if (1) McPoyles and Frank entered into an oral contract whereby McPoyles will buy a house from Frank, (2) McPoyles then accepted an offer to purchase their current house, (3) aftewards, Frank accepted a higher offer on his house and rescinded the deal with the McPoyles?
Yes - b/c McPoyles sold their own house - normally land sales contracts must comply w/ SOF (writing, signed by party, contain essential terms) but McPoyles here are entitled to specific performance b/c they detrimentally relied on Frank’s oral promise by accepting a sale of their own home - this would subject McPoyles to hardship and estop Frank from asserting SOF defense - also oral contracts may be enforceable if McPoyles partially performed
Would Groundskeeper Willie be entitled to specific performance to buy a house against Abe Simpson despite the lack of a written land sale contract if (1) Willie paid a portion of the purchase price, (2) possessed the house, and (3) made a substantial improvement of the house?
Yes, especially if Willie has completed all three tasks - generally he only needs to have completed two in order to be considered to have part performed, which would allow him to compel specific performance in the absence of a written land sale contract
