Settlement Day

Question 1

Tender

Answer 1

Definition: Tender means to fulfill one’s responsibility or obligation

*The buyer must be prepared to tender the finances/ payments and the seller must be prepared to tender Marketable title on the Date of settlement.

Question 2

BLACK LETTER LAW for Tender

Answer 2

1. Neither Party can put the other party in breach of contract if they themselves are not ready to perform their conditions /tender

Question 3

3 Reasons why the seller does not cure a defect:

Answer 3

1. The defect is incurable
2. The defect was curable but simply did not do it
3. The seller did not do it because he did not receive adequate notice.

(a) If the buyer does not provide notice within a reasonable time, the buyer has to forfeit his deposit but can still get out of the contract.

Question 4

What does a buyer and seller need to show in order to recover?

Answer 4

*Buyer must show that he is ready to meet all of his conditions.

*Seller must show that he is ready to meet his conditions, with one exception if the Seller was not notified within a reasonable time, and the buyer will be held responsible for breaching the contract.

Question 5

Equitable Conversion Remedy

Answer 5

Equitable Conversion is a remedy that can be requested if something unforeseeable occurs during the executory period such as death, incapacity

Question 6

BLACK LETTER LAW for Equitable Conversion. *6

Answer 6

1. If death occurs we will treat what would have occurred on settlement day as already having occurred as of the date the contract was signed
2. Buyer : equitable owner of the land. Seller: equitable owner of the money,
3. Actual transfer on settlement day
4. If the buyer dies and equitable conversion is granted:

(a)Land will go to the person in the buyer’s will to take the real property

(b)The land price must be paid for by the person who is in the buyer’s will to take the personal property

Question 7

Risk of Loss

Answer 7

When a property is destroyed/ diminished in value due to an act of god/ rezoning, look to the terms of the contract. If the contract is silent look at the jurisdictional rule.

1. Majority Rule: Buyer bears the risk of loss from the date the contract was signed and when the buyer became the equitable owner of the land

(a)EXCEPTION! if the seller caused the problem, then he bears the risk of loss.

2. Minority Rule
   The seller bears the risk of loss.

Question 8

Uniform Bender and Purchase Act (Risk of Loss)

Answer 8

Seller bears the risk of loss until possession changes which is when the risk falls on the buyer.

Question 9

Uniform Loss of Risk Act

Answer 9

(Land Installment Contract)
Buyer takes possession immediately upon contract signing and so whoever has possession of the property, carries the risk of loss.