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Property II
University of Dayton School of Law
Watson, Blake Andrew

Real Property II
Watson
Spring 2016
 
Contracts for the Sale of land
The Statute of Frauds and Part Performance
SOF- land sales must be in writing
Can be done electronically due to the E Sign Act
Written K Must Contain
Parties
Description of land
Indication of sale
Price
Promises of parties
Signatures of party charged
Vague terms may be made clear by extrinsic evidence
Oral rescission is permissible despite lack of writing
Oral modifications must have writing- oral mod of “time of performance” clauses are generally upheld
SOF is not necessary when part performance is present
Oral K can satisfy SOF if also part performance
Evidentiary rationale: showing performance “unequivocally referable” to the agreement to the point that it shows there was a K and it must be upheld to support equity
Seller can use this one to enforce
Reliance rationale: equity/estoppel- must be shown that he has relied and acted on sale K even though it’s oral
Seller can’t use this one to enforce, because they have (assumingly) not relied on the K
Part Performance- takes it out of statute of frauds
Payment
Possession
Substantial improvement
(Money mortgage= 2docs)
Promissory note (I will pay, you have right to collect the money)
Further note (you have the right to force foreclosure)
He’s deferring right to amount owed to collect over time with interest
Loan to Value Ratio
K price, desired loan, Downpayment
Downpayment= equity
Appraisal, desired loan, downpayment
 
Remedies and Real Estate Contracts
Damages when seller defaults due to title Failure
Loss of bargain damages THIS IS THE AMERICAN RULE
Common law of America
ENGLISH RULE: buyer may only recover deposit unless seller refuses to convey title or is guilty of fraud or deceit
Difference between market value at time of breach and K price and other harms reasonably foreseeable at time of breach
Also, reasonably foreseeable consequential (need to be proven!, not speculative) flowing directly from the breach
Title exam fee/attorney fee/survey
Addt’l rent/taxes/mortgage
Loss of particularly favorable financing from a bank or savings association that is now no longer available
Expenses connected with resale are NOT allowed
Specific Performance
Judicial Remedies
Restitution (putting back to status before K, so basically deposit, title search, survey and inspection costs.)
Compensatory damages
Benefit of the bargain damages
Reimbursed injured for costs from the breach- must be foreseeable, but do not need exact amount to be known
Expectancy damages
Difference between K price and FMV at time of breach
Specific Performance
Will be denied if.
Produces unjust results
Subsequent BFP has bought land without n

ng another remedy
When there is a justifiable reliance or material change from the party ONCE the non breacher chooses their remedy, then the non breacher is bound by that choice
If clearly the intention of the parties as evidenced by the K, and to the extent that it is not unconscionable, the LID can be enforced if damages were difficult to prove at creation of K
Second Look Claim- Ohio
Must look to see what the parties intended from the LID clause
Wording is important
Seller seeks to enforce LID clause when the buyer breaches- generally the earnest money as damages
Vendee lien arises by law when seller breaches and keeps the deposit
Lien- a right ti keep possession of property belonging to antoher person until a debt owed by that person is discharged
Need to record it so BFP can’t claim no notice
You can use it to force the sale of the property
Liens
Judgement lien- force the sale of the property and take debt out of that- owner gets any surplus
if not greater than surplus, the lien is extinguished and the debt remains
Tax liens
Vendor lien
Vendee lien
Mortgage lien