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18. Will the purchaser likely be successful?
The purchaser has sued the seller for damages.
There is no applicable statute.
A seller and a purchaser signed a contract for the sale of a 60-year-old house. The contract required a warranty deed to be given at closing. The contract was silent regarding the condition of the house, and the purchaser did not ask. The purchaser received a warranty deed with all covenants of title at the closing and promptly recorded the deed. Approximately one month after the closing, the furnace in the house stopped working, the basement flooded, and the roof leaked so badly that the second floor could not be occupied. The seller, when told of the house's condition, was genuinely surprised.
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The traditional common law rule is that a seller does not have liability for failing to disclose to a buyer defects in the property or facts that reduce the property's value. However, there have always been exceptions to this general principle of non-liability for non-disclosure of defects known by the seller. First, the seller will have liability if she makes an affirmative misrepresentation about the property that is relied upon by the buyer. Second, the seller will be liable in fraud if she takes affirmative action to conceal or cover over the defect.
C is correct. The seller made no representations about the condition of the house, and there was no statute in place requiring any disclosure regarding the condition. Even when a seller has a duty of disclosure, it is only to disclose known defects.
A is incorrect. The implied warranty of fitness for a particular purpose does not come automatically with every sale. The merchantability warranty relates to the «ordinary» purpose of the goods. The fitness warranty relates to a «particular» purpose that the buyer has communicated to the seller, and the seller, under the circumstances, should realize the buyer is relying on the seller to provide goods that will satisfy that communicated purpose. Any implied warranty of fitness for conveyed real property applies only to newly-constructed residential property conveyed by a builder or developer.
B is incorrect. The general warranty deed conveys title where the seller makes six covenants to the buyer as part of the conveyance. The six covenants are further divided into present and future covenants. The covenants in a warranty deed relate to the title of the property, not the physical condition of the property.
D is incorrect. The purchaser will be unsuccessful, but not because of the doctrine of merger. The doctrine of merger relates to title issues having to do with real property, not the physical condition of the property.