Land sales are known as conveyances. During a sale of property, the grantor and grantee may have enforceable rights. The source of rights depends on when the rights are enforced.
I. Contract for Sale of Land- prior to closing, a contract for the sale of land is the source of rights for the grantor and grantee. A contract for the sale of land is commonly called a "purchase and sale agreement."
a. At a minimum, a valid contract for the sale of land must include a written document containing:
i. the signatures of the parties bound by the contract, and
ii. a description of the land that is precise enough so that the land to be sold is uniquely described
Comment- If a price term is lacking, a court may still enforce the contract by determining a reasonable price.
Exceptions- an oral contract for the sale of land may be enforced if there is:
1. partial performance- partial performance of the sale has occurred if the buyer of the land has taken possession of the land and paid at least a portion of the price; or
2. estoppel- estoppel exists if one party to the contract has reasonably relied on promises of the other and has taken action in reliance, so that fairness requires that the oral contract be enforced.
Example- Slash orally agrees to sell his land to Flea. Flea, relying on the fact that Slash said that he would sell the property, builds a house on the land. A court may require Slash to sell the land to Flea despite the lack of a written contract.
b. Implied promises of the seller of land- by law, at the time of sale, the seller of land implies that he has marketable title and has disclosed all latent defects with the land.
i. marketable title- marketable title refers to the fact that the seller of the land is the rightful owner of the land at the time of sale. A purchaser of land is free to rescind a contract for the sale of land if there is "reasonable doubt" as to whether the seller actually owns the estate, which the seller claims to be transferring.
Example- Brook enters a contract to purchase Whiteacre from Andre. Subsequently, Andre is sued by Mac, who claims to own Whiteacre. Brook may rescind the contract, because Andre does not have marketable title in Whiteacre.
ii. duty to disclose latent defects- under the duty to disclose latent defects, the seller of land is obligated to disclose to the purchaser all known defects that are not readily visible.
Example- Segovia sold a house to Liebert knowing that the underground plumbing needs to be repaired. Liebert can sue Segovia for the repair of the plumbing.
II. Closing- following a contract for the sale of land comes "closing." Closing occurs when an executed deed for the land is delivered to the purchaser of the land. At closing the contract for the sale of land is no longer the source of rights for the parties; the deed becomes the operative document at closing.
a. An executed deed includes:
i. words of conveyance (e.g., "I grant …")
ii. describes the land so that it is uniquely identified
iii. contains the signature of the grantor of land.
b. Delivery of a deed occurs when the grantor intends to be "immediately bound" by the deed. A physical handing over is not necessary, but is generally sufficient to achieve delivery. Words, without action, may be sufficient to transfer the deed.
Example- Sarnhoff executes a deed to Marconi and states "the deed to the farm is yours." The existence of an executed deed and the statement are enough for the deed to be operative.
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