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33. What is the most likely reason that the woman was successful?
After the woman had the foundation repaired by a cement contractor at a cost of $25,000, she successfully sued the builder to recover that amount from him.
Four months after moving in, the woman discovered a number of latent defects in the foundation that caused the house's basement to take on water during heavy rains. The woman contacted the builder about the problem. Toward the end of their heated conversation, the builder yelled at her, «So get it fixed!»
The builder of a new house sold the house to a buyer, conveying it to the buyer by warranty deed. One year later, the buyer sold the house to a woman for $50,000 more than the buyer had paid, conveying it to the woman by a quitclaim deed.
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In addition to any express warranties that a homebuyer and contractor have articulated in a contract, some warranties are implied by law in construction contracts. In other words, although land sale contracts generally contain no implied warranties, an exception exists for new home sales by a builder-vendor. Although courts are split, many find that the implied warranties apply to subsequent buyers.
Two types of implied warranties exist in these types of contracts: (i) the implied warranty of habitability, which guarantees that the house will not have any major defects rendering the house uninhabitable when completed; and (ii) the implied warranty of skillful construction, which focuses on the manner in which the work is performed. Under such a warranty, the contractor has an obligation to fix the problem.
A warranty deed contains a covenant of further assurances that assures the grantor will do what is needed in the future to perfect the title if it turns out to be imperfect. A quitclaim deed contains no covenants that the title is valid.
A is correct. The call of this question poses a hypothetical: IF the woman prevails, what is the most likely reason? When the builder sold the house to the buyer, it was a contract for the sale of a new home by a builder-vendor. In such a scenario, there is an implied warranty of habitability in the construction. The woman was a subsequent buyer of that home. Her best argument is that the warranty of habitability stayed with the home when it passed to her, a subsequent buyer, and that she has the right to enforce it against the builder for the $25,000 cost of fixing the latent foundational defects.
B is incorrect. The fact that the buyer sold the house to the woman for $50,000 more than what the buyer paid has no effect on the woman's right to sue the builder for damages. Her ability to recover the cost of fixing the foundation problem lies in the builder's duty to ensure the original construction was habitable, not whether the woman got a fair deal with the buyer.
C is incorrect. Even though the builder yelled at her to «get it fixed,» implying that the woman should find someone to fix it, this did not constitute any type of commitment by the builder to fix the problem with the foundation. Subsequently, the woman would have had no reasonable justification for relying on this statement as any sort of promise by the builder to pay.
D is incorrect. The woman would not benefit from invoking the covenant of further assurances, which would have been contained in the warranty deed between the builder and the buyer, not between the buyer and the woman. Moreover, a covenant of future assurances is a protection for the grantee (here, the buyer) in the event that the title to the house ends up being imperfect and guarantees action from the grantor to perfect the title. This would not help the woman recover in this scenario because she received the house through a quitclaim deed and is seeking to sue the builder, not the buyer.