Full access allows:
- Solve all tests online without limits;
- Remove all advertisements on website;
- Adding questions to favorite list;
- Save learning progress;
- Save results of practice exams;
- Watching all wrong answered questions.
42. If the seller sues the buyer for breach of contract, is the court likely to find the buyer in breach?
A buyer agreed to purchase a seller's house for $250,000 «on condition that the buyer obtain mortgage financing within 30 days.» Thirty days later, the buyer told the seller that the buyer would not purchase the house because the buyer had not obtained mortgage financing. The seller asked the buyer where the buyer had tried to obtain mortgage financing, and the buyer responded, «I was busy and didn't have time to seek mortgage financing.»
Comments (0)
There are no comments at the moment. If you found an error or think question is incorrect, tell everyone about it
Only signed in users can write comments
Signin
A is incorrect. A performance that is subject to an express condition cannot become due unless the condition occurs or its non-occurrence is excused. However, the duty of good faith, which is implied in every contract, imposed an obligation on the buyer to make reasonable efforts to secure mortgage financing. Because the buyer made no such efforts, the non-occurrence of the condition to the buyer's obligation to purchase the house--the buyer's securing financing--was excused. Accordingly, the court is likely to find that the buyer is in breach.
B is incorrect. The duty of good faith, which is implied in every contract, imposed an obligation on the buyer to make reasonable efforts to secure mortgage financing. Accordingly, the buyer's promise to secure financing was not illusory. A performance that is subject to an express condition cannot become due unless the condition occurs or its non-occurrence is excused. In this case, the non-occurrence of the condition to the buyer's obligation to perform was excused, because the buyer failed to make reasonable efforts to secure mortgage financing. Therefore, the court is likely to find that the buyer is in breach.
D is incorrect. The contract explicitly stated that the buyer's obligation to perform was expressly conditioned on the buyer obtaining mortgage financing. A performance that is subject to an express condition cannot become due unless the condition occurs or its non-occurrence is excused. However, the duty of good faith, which is implied in every contract, imposed an obligation on the buyer to make reasonable efforts to secure mortgage financing. Because the buyer made no such efforts, the non-occurrence of the condition to the buyer's obligation to purchase the house--the buyer's securing financing--was excused. Accordingly, the court is likely to find that the buyer is in breach.