1Encumberances
liens, easements, and other rights of third parties in the land
2Buyers remedies for unmarketable title?
- Rescission / Restitution
- Specific performance with abatement
- Compensatory damages
- Require seller to quiet title.
3Defects that do not make title unmarketable
(1) A lien that is definite, does not expose buyer to litigation, and payable with sale funds.
(2) If there is some threat of litigation then there is a threat that it would be unmarketable.
(2) A title defect that is open and visible.
4Time is of the essence
-If time is of the essence and a party is late at all there is a material breach
-If one can and one can't, then there's no requirement to wait a reasonable time to perform.
5 • If one can and one cannot, then there is no requirement to wait a reasonable time to perform.
6Mutual failure to tender?
Then the contract goes away because neither are in breach.
7Traditional Common law for Land Transactions
Caveat Emptor
- Seller has no duty to disclose material latent defects not visible on a reasonable inspection
Exceptions:
- Seller cannot engage in fraud misrepresentation
- Sell cannot
8A seller who knows of a defect is liable if:
(1) It materially affects the value of the property
(2) It is latent and unknown to the buyer (not visible on reasonable inspection)
(3) And if that the seller does not disclose.
9What is an "as-is" clause and what's it effect?
- Clause in contract that defects in property will not form basis for rescission of contract.
- Very enforceable
- Effect if precisely written, encompassing all the problems that may occur.
- True for both caveat emptor and seller's duty to disclose
10Rule of specific performance
A contractual remedy in which the court orders a party to actually perform its promise as closely as possible, because monetary damages are somehow inadequate to fix the harm. Most commonly ordered in cases involving real property and rare chattels.
11Mother conveyed Blackacre to Son. Later she decided she wanted to add Daughter as a grantee, so Son returned the deed to mother, who added Daughter.
Valid?
No, once a deed it's a deed.
12O educates a deed conveying Blackacre to A but gives the deed to Friend to hold and deliver to A at O's death.
Valid?
Yes, so long as O cannot get the deed back. (Death escrow)
13 O conveys Blackacre to A in FSA in a deed absolute on its face but says "This deed is not effective until I die."
Valid?
No, this is a testamentary deed and is VOID.
14When may a contract for the transfer of an interest in land may be specifically enforced?
In spite of failure to comply with the Statute of Frauds:
if it's established that the party seeking enforcement, in Reasonable Reliance on the contract and on the Continuing Assent of the party against whom enforcement is sought, has so changed his position that injustice can be avoided only by specific enforcement.
15Specific performance of an otherwise invalid contract is available Restatement (Second) of Contracts, §129 (1981)
(1) if the party seeking enforcement changed positions based on a reasonable belief that the agreement was valid,
(2) injustice would result if she were not granted equitable relief.