Blog

A seller entered into a written contract with a vintner on April 4, whereby the seller agreed to convey a vineyard to the vintner for $2 million. The terms of the contract set the closing date as June 1. At the time the seller entered into the agreement with the vintner, the seller had no interest in the vineyard. On April 15, the seller entered into a written agreement with a landowner, whom the seller believed to be the owner of the vineyard. According to the terms of the agreement, the landowner was to convey the vineyard to the seller on or before May 25. Another term of the agreement stated “time is of the essence.” On May 24, the landowner conveyed his interest in the vineyard to the seller. When the seller went to record the deed, she discovered from records in the recorder’s office that the landowner held clear title to only seven-eighths of the vineyard. It took some time for the seller to remove the cloud from the title and procure ownership in full of the vineyard. She finally did so on August 1, and on that day she tendered a warranty deed to the vineyard to the vintner. The vintner refused to tender $2 million or any other sum to the seller, asserting that the seller had broken her agreement by failing to close on June 1. The seller then sued the vintner for specific performance. If the vintner prevails, what is the likely reason?

A rancher entered into a written contract to buy a farm from a farmer for $100,000. The contract stipulated for closing on September 30. In addition, the contract contained the following provision: “The taxes shall be prorated as agreed to by the parties at a later date.” Upon the signing of the contract, the rancher gave the farmer a check for $10,000 as a down payment. On September 28, the rancher notified the farmer that he would not be able to close on the farm until October 2, because the closing on his current home, the proceeds from which were to be applied to his purchase of the farm, was unavoidably delayed due to his buyer’s illness. Meanwhile, the farmer had difficulty finding a home she liked as well as the farm. She decided that she would rather not sell the farm and wished to avoid the contract with the rancher. On October 2, the rancher showed up at the closing with the $90,000 to tender to the farmer. The farmer did not show up. The rancher sues for specific performance. In whose favor will the court most likely rule?

A cyclist was injured when a driver ran a red light. The cyclist subsequently sued the driver to recover for her injuries, and obtained a money judgment of $50,000. The state where the cyclist and the driver reside has the following statute: “Any judgment properly filed shall, for 10 years from filing, be a lien on the real property then owned or subsequently acquired by any person against whom the judgment is rendered.” The cyclist filed the judgment in the county where the driver owned a valuable ranch. Sometime later, the driver, who was also injured in the accident, undertook to remodel all the buildings on the ranch to make them wheelchair-accessible. The driver borrowed $30,000 from a bank for the improvements, securing the loan with a mortgage on the ranch. The bank properly recorded its mortgage. Before he paid any principal on the bank’s loan, the driver decided to build a new barn. He borrowed $20,000 from a financing company for this purpose, also secured by a mortgage on the ranch. The financing company properly recorded its mortgage. The driver subsequently defaulted on the bank’s mortgage, and the bank brought a foreclosure action, joining the financing company in the proceeding. The foreclosure sale resulted in $90,000 in proceeds after all expenses and fees were paid. The driver still owes the cyclist $50,000, the bank $30,000, and the financing company $20,000. How should the foreclosure proceeds be distributed?

A seller put her house and lot on the market for $200,000. After receiving several offers within $5,000 of her asking price, the seller entered into a contract to sell the house and lot to a buyer for $200,000. The contract provided that the buyer put up $4,000 in earnest money, which the seller could treat as liquidated damages unless: The seller fails to tender marketable title to the buyer by the agreed-upon closing date, the seller commits a material breach of this contract, or the buyer dies prior to the closing date, in which case the earnest money shall be reimbursed to the buyer’s estate. The contract was signed on July 24, and the closing date was set for September 12. On August 5, the buyer was seriously injured in an accident. On September 10, the buyer was released from the hospital in a wheelchair. He determined that a ranch-style house would make his life much more bearable, but the seller’s home was two stories. The buyer asked the seller to cancel the contract and to refund the $4,000 earnest money. The seller refused. The buyer did not appear on the closing date. On September 16, the seller contracted to sell the home to a purchaser for $198,000. The closing occurred as planned on October 20. The buyer files suit against the seller, praying for a refund of the $4,000 earnest money. How much is the buyer likely to recover?

Which explanation accurately describes antagonists?

A lawyer rented an office building for his law practice and subleased most of the building to three other tenants. The lawyer paid $2,000 per month to the owner and charged his subtenants $600 per month each. After having been in the building for three years, the lawyer and the owner orally agreed that the lawyer would purchase it for a price of $120,000, to be paid in monthly installments of $2,000 over a five-year period. It was further agreed that title would remain in the owner’s name until $48,000 had been paid on the total price, whereupon the owner would deliver a deed to the lawyer. Shortly thereafter, the lawyer spent $4,000 redecorating his suite. During the course of the next two years, the lawyer hired an associate and placed her in one of the offices formerly occupied by one of the subtenants, and raised the monthly rental he charged the other two subtenants to $700. Two years after the agreement with the owner, the lawyer demanded that the owner convey the building by delivery of a deed. The owner refused, denying that any oral agreement for sale had ever existed. The lawyer brings an action for specific performance against the owner, who pleads the Statute of Frauds as a defense. If the owner wins, what is the likely reason?

Erick and Travis met at a local restaurant to discuss the sale of Erick’s house. After a long negotiation, Erick orally agreed to sell his home to Travis for $300,000. Travis handed Erick a check for the total amount (with a notation on the check that the monies were for the purchase of Erick’s house). Travis in turn handed Erick the keys to the house, telling him that he could move in immediately. However, as they were leaving the restaurant, the two began to argue. Infuriated, Erick returned the check to Travis and grabbed the keys out of Travis’s hand. Travis files a complaint seeking specific performance of their agreement. How should the court rule?

A developer and an investor had been in the real estate business for many years. Because of their long-standing relationship, the developer and the investor, neither of whom was an attorney, often dispensed with certain legal formalities when dealing with each other, thus saving the costs of lawyers’ fees and other attendant expenses. The investor owned a parcel of land that the developer was interested in. At lunch one day, the developer offered to buy the parcel from the investor for $50,000. The investor accepted the developer’s offer, and the parties agreed on June 15 as the closing date. The developer wrote out and handed the investor a check for $2,500 with “earnest money” written in the memo, and they shook hands on their deal. A few weeks before closing, the developer called the investor and told him she had changed her mind about purchasing the land because of a sudden economic downturn in the area. The investor appeared at the developer’s office on June 15 with the deed to the land in his hand. The developer refused to tender the balance due, and the investor sued the developer for specific performance. Will the investor prevail?

Which of the following explanations accurately explains positive dromotropic effect?

A landlord owned an apartment building. Needing money to make some repairs and improvements, he went to a bank and applied for a loan. The bank loaned the landlord $100,000, secured by a mortgage on the apartment building. Last month, the landlord defaulted on his mortgage payments. The bank instituted foreclosure proceedings and wishes to take possession of the apartment building in order to collect the rents from the property. Does the bank have the right to take possession of the apartment building before foreclosure?