A property in Texas closes on October 10. The annual property taxes are $9,000 and have not been paid for the current year. The seller is responsible for taxes through October 9 (the day before closing). Using a 365-day year and a non-leap year, what tax proration credit does the buyer receive from the seller at closing?
Correct Answer
B) $6,953.42
Jan 1 through Oct 9 = 282 days (31+28+31+30+31+30+31+31+30+9). Daily rate = $9,000/365 = $24.6575. Seller's share = $24.6575 × 282 = $6,953.42.
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An assignment of contract transfers one party's rights and obligations under a contract to a third party called the assignee. The original party, known as the assignor, transfers their contractual position to someone who was not originally part of the agreement.
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.
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