Regular forms of contract are easily obtainable at any law stationer's.1 Hence, the elemental essentials of such contracts need not be discussed. Having this form, the question arises, How shall its blanks be filled?
First of all, it is absolutely imperative that all the oral understandings of the parties be reduced to writing and put into the contract. If the vendor orally agrees that he will "throw in" with the sale the carpets, chandeliers or other personal property on the premises, see that it is so stated in the contract. If he resorts to the old-fashioned - and we may say somewhat conceited-language that "his word is as good as his bond," and that if he says he will allow the personal effects mentioned to pass with the property or makes any other oral agreement, he means all he says, the statement is in nowise binding and should be declared unsatisfactory. If the vendor means to keep his promise, he should have no objection to putting it in writing.
It is not wise to rest anything on a mere "understanding" between the parties. When once a written agreement is made, the law holds that all the understandings and arrangements of the parties are included in this written agreement, and oral evidence is not admissible to contradict or vary its terms. There are exceptions to this rule of law but we shall not state them here. Compliance with the rule is always safe and is much more satisfactory than to attempt to determine when exceptions may safely be made.
1 See the forms used in various states, given in Part VII - Forms 17-31, Ch. XXXIX infra.
Failure to properly describe property in the contract for its sale has given rise to much litigation. Often the contract is entered into so hastily that it is impracticable to obtain any accurate description for inclusion in the contract.
The courts say that the contract must specifically or with sufficient certainty describe and identify the land proposed to be conveyed. There are various ways of identification - a declaration as to its present ownership; reference to an earlier deed; by the enumeration of the particular grants of which a tract is composed; by a street number, etc.
All these methods are, however, unsatisfactory. There should be a detailed description of the property itself. The state and countv in which the land lies should be given, and in states where land is so subdivided, the range, township, section and quarter section of which it forms a part should be set forth.
From the viewpoint of the buyer, the frequent practice of describing city property by street number alone is most unsatisfactory as well as dangerous. When property is thus referred to by street number alone, the purchaser must accept a deed of the property bearing the street number, regardless of its actual dimensions. He may have understood the property to have a frontage of 100 feet, but if the property bearing that street number has a frontage of but 75 feet, he is bound to accept its transfer in satisfaction of his contract, unless he has been misled by misrepresentations. If the property is described by street number and also by dimensions, the purchaser is entitled to the frontage given by the dimensions in the absence of any other modifying circumstances.
The best method is to describe the property by metes and bounds. By this is meant that the actual distance in feet and inches from the starting point be stated, that the courses be stated, together with the specific distance of each course, and also whether the courses run parallel to side streets or at right angles to the main street, and if the courses run through party walls, that fact should be distinctly stated.
A party wall may be defined as a wall which serves for two buildings. This perhaps is not a technical definition but is at least one which may be easily understood. The courts have held that under certain conditions a party wall may be an encumbrance upon land. In other words, situations frequently arise where the existence of a party wall between two buildings may give to either owner legal rights, known as "easements," in the property of the other. In such case the party wall is an encumbrance, and while this is not ordinarily of such a nature as to be seriously detrimental to the property, it may under certain conditions be sufficient and good ground to refuse to take title to the property, and the possibility of complication should be avoided by stating the facts.
Generally the existence of an encumbrance on real property not mentioned in the contract for the sale of this property, gives the purchaser the right to reject the title and sue for damages. The damages are usually made up of the amount paid on the contract, the expenses of examining the title and of surveying the property, and (though not in all cases) the difference between what the property is actually worth (its market value) and the price stated in the contract.
The parties to a contract for the sale of real estate may, of course, modify or wholly annul the rights and liabilities which the law imposes on each. For instance, they may agree that if the purchaser fails to perform, the seller may retain the deposit as liquidated damages and that the contract be then deemed null and void. Or they may agree that if the seller is unable to make good title he shall return the deposit, or the deposit in addition to certain expenses, and that the contract then become inoperative. Or they may agree that the failing party shall be liable to the other in a fixed amount as liquidated damages. Or they may agree upon the situation of each in case the title is unmarketable. Indeed, the variations which may be engrafted upon the legal status of the parties are numerous.2