parent nodes: equitable conversion | implied contract terms
Bryant v Williamson Real Estate
Facts
P enters into contract to buy building for $175K; they pay $10K up front to D, no date set for closing
Before deed is delivered, a water line breaks, causing heavy damage
P asks D to either repair the damage or rescind the contract
D declines and resells the property; P sues for recission and repayment of their down payment
Analysis
Contract language that "the owner is responsible for said property until the Deed has been delivered" is sufficient to shift the risk of loss through contract to the vendors. Another clause creating an "As Is" condition, however, did not shift the risk back, but only means that the purchaser must take the premises covered in the real estate in its present condition as of the date of the contract. The risk of loss during the executory period is thus on D.
Where the risk of loss is on the vendor, and the damage to the property insubstantial, specific performance would be the appropriate remedy. However, where the property damage is substantial, recission is more appropriate.
See generally equitable conversion