In a Scottsdale purchase contract, the buyer includes a provision stating 'Seller warrants that the property is not subject to any pending or threatened litigation.' After closing, the buyer discovers an ongoing boundary dispute with a neighbor. What is the buyer's best course of action?
Correct Answer
A) File a claim for breach of warranty against the seller
The buyer can file a breach of warranty claim against the seller since the seller specifically warranted no pending litigation, and the boundary dispute constitutes threatened or pending litigation that existed at the time of the warranty. Option B is incorrect because rescission is typically not available after closing for warranty breaches. Option C is incorrect because the specific warranty creates ongoing liability for the seller. Option D is incorrect because the primary liability rests with the seller who made the warranty, not necessarily the agent.
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Related Topics & Key Terms
Key Terms:
Related Concepts
A bilateral contract is an agreement in which both parties exchange promises and are both obligated to perform, while a unilateral contract is one in which only one party makes a promise and the other party is not obligated to act.
A breach of contract occurs when one party fails to perform their obligations under the contract without a legal excuse. The non-breaching party is entitled to legal remedies including damages, specific performance, or contract rescission.
Consideration is something of value exchanged between parties to a contract, making the agreement legally binding. It can be money, a promise to act, a promise to refrain from acting, or anything else of value.
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