The Land Sale Contract Flashcards
Statute of Frauds requirements
(i) Be in writing;
(ii) Be signed by a party to be charged; and
(iii) Contain all of the essential terms
Part performance
(SOF exception)
(i) Payment of all or part of the purchase price;
(ii) Possession by the purchaser; or
(iii) Substantial improvement of the property by the purchaser.
Exceptions to the Statute of Frauds
a. Part performance
b. Full performance
c. Detrimental reliance
d. Admission
Recission of a Contract
Oral recission is permissible
Marketable Title
Marketable title is a title that is free from defects that create an unreasonable risk of litigation.
Timing
Unless otherwise agreed, the seller is not required to deliver marketable title until the closing.
Remedies for unmarketable title
A buyer may rescind the recover out-of-pocket costs and earnest money payments, sue for breach, or bring an action for specific performance with an abatement of the purchase price, but she usually cannot do so until the date of closing.
Time of the Essence
Generally, a court will assume that time is not of the essence, unless the contract specifically states it, circumstances indicate it was the intention of the parties, or one party gives notice that time is of the essence.
If time is not of the essence, strict adherence to the closing date will not be required in equity.
Implied Warranty of Fitness or Suitability
Implied in almost all jurisdictions for the sale of a newly constructed residence.
Plaintiffs
(New Homes)
A majority of jurisdictions permit not only the initial homeowner-purchaser but also subsequent purchasers who do not contract directly with the commercial developer or builder to recover damages.
Disclaimer, waiver, and notice
(New Homes)
The implied warranty may be disclaimed by the builder or waived by the homeowner if the language is clear and unambiguous. General disclaimers (“as is”) are not sufficient.
Duty to Disclose Defects (All Homes)
A seller of a residence must disclose all known material physical defects to the buyer. To be material, the defect must substantially affect the value of the residence, impact the health or safety of a resident, or affect the desirability of the residence to the buyer.
Merger
An obligation contained in the contract of sale is merged into the deed and cannot thereafter be enforced unless the deed contains the obligation.
Risk of Loss
The risk of loss during the time between the execution of the contract and the closing is on the buyer, regardless of whether the buyer takes possession of the property.
Insurance
Unless the contract requires otherwise, the seller does not have a duty to carry casualty insurance. But, when the seller does have casualty insurance and the buyer has risk of loss, the seller is required to give the buyer credit against the purchase price in the amount of insurance proceeds.
