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22. If a court finds for the seller, what will be the likely reason?
There is no applicable statute.
The handwritten contract was wholly silent as to matters of financing, risk of loss, and insurance. The buyer declared the contract voided by the fire, but the seller asserted a right to enforce the contract despite the loss.
The house had been the seller's home, but he had moved to an apartment, so the house was vacant at all times relevant to the proposed transaction. Two weeks after the parties had entered into their contract, one week after the buyer had obtained a written mortgage lending commitment from a lender, and one week before the agreed-upon closing date, the house was struck by lightning and burned to the ground. The loss was not insured, because three years earlier, the seller had let his homeowner's insurance policy lapse after he had paid his mortgage debt in full.
A seller owned a single-family house. A buyer gave the seller a signed handwritten offer to purchase the house. The offer was unconditional and sufficient to satisfy the statute of frauds, and when the seller signed an acceptance, an enforceable contract resulted.
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A is incorrect. It is not relevant who drafted the contract. The contract was silent regarding any risk of loss. A minority of states have adopted the Uniform Vendor and Purchaser Act, which places the risk of loss on the seller instead of the buyer. The court found for the seller, and thus the minority rule, which places the risk on the seller under these facts, is inapplicable. Under the majority common law rule of equitable conversion, the individual with the equitable interest bears the risk of loss. The equitable title passed to the buyer when the seller signed the contract, because the contract was unconditional and was silent regarding the risk of loss.
B is incorrect. There were no conditions in the contract of sale. The contract became binding when the seller signed the acceptance. The buyer would have been obligated to purchase even if the buyer had not received a loan commitment. Since the jurisdiction has no statute, the Uniform Vendor and Purchaser Act, which places the risk of loss on the one in possession, is not applicable. The court found for the seller, and thus the minority common law rule, which places the risk on the seller under these facts, is inapplicable. Under the majority common law rule of equitable conversion, the individual with the equitable interest bears the risk of loss. The equitable title passed to the buyer when the seller signed the contract, because the contract was unconditional and was silent regarding the risk of loss.
C is incorrect. Possession does not pass to the buyer until closing absent a contrary provision in the contract of sale. In a jurisdiction that has adopted the Uniform Vendor and Purchaser Act, if a contract is silent regarding the risk of loss, the risk of loss is on the party in possession. The question notes, however, that the jurisdiction has no applicable statute. The court found for the seller and thus the minority common law rule, which places the risk on the seller under these facts, is inapplicable. Under the majority common law rule of equitable conversion, the individual with the equitable interest bears the risk of loss. The equitable title passed to the buyer when the seller signed the contract, because the contract was unconditional and was silent regarding the risk of loss.