LAW 703 Lecture Notes - Lecture 5: Estoppel, Easement, Rescission
LAW703 – Lecture 5
Chapter 3 – Contractual Terms in the Agreement of Purchase and Sale
Categories of Different Terms:
1. Puffs
2. Promises and Warranties
3. Conditions Precedent
4. Representations
5. Time of the Essence
6. Closing Conditions
7. Indemnities
8. Advising Clients
Puffs – Never intended to create contractual consequences
Reasonable person test – would not believe or rely on statement
Promises and Warranties
Condition – fundamental promise
oBreach of condition – innocent party has the option to
End contract and sue for damages or
Complete contract and sue for damages
oConditions Precedent – contingencies that must be satisfied before some or all
promises in APS are enforceable.
Party relying on condition precedent must act in good faith
Warranty – minor promise
oBreach of warranty – remedy is damage
Intermediate – “wait and see” whether it is a condition or warranty
Representation – a statement about a material fact relied upon by a person and induces that
person into contract.
Misrepresentation – false representation
Remedy:
oInnocent misrepresentation – rescission (if deal has not closed)
oNegligent misrepresentation – damages, rescission (if deal has not closed)
oFraudulent misrepresentation – damages, rescission
Closing Conditions – fulfillment of all terms and conditions and truth of all representations is a
condition to close.
Indemnities – a party agrees to indemnify or reimburse for any claim by a third party.
True Conditions Precedent – cannot be waived
-Turney V Zhilka
find more resources at oneclass.com
find more resources at oneclass.com
Document Summary
Chapter 3 contractual terms in the agreement of purchase and sale. Categories of different terms: puffs, promises and warranties, conditions precedent, representations, time of the essence, closing conditions. Puffs never intended to create contractual consequences. Reasonable person test would not believe or rely on statement. Condition fundamental promise: breach of condition innocent party has the option to. Complete contract and sue for damages: conditions precedent contingencies that must be satisfied before some or all promises in aps are enforceable. Party relying on condition precedent must act in good faith. Warranty minor promise: breach of warranty remedy is damage. Intermediate wait and see whether it is a condition or warranty. Representation a statement about a material fact relied upon by a person and induces that person into contract. Remedy: innocent misrepresentation rescission (if deal has not closed, negligent misrepresentation damages, rescission (if deal has not closed, fraudulent misrepresentation damages, rescission.
