A word of caution may be given as to the importance of seeing that all proper formalities are complied with before a deed is delivered. This applies not only to the receipt of the actual consideration, which may involve the execution of a mortgage, but also to the surrender of any outstanding contract.
It has been shown that a contract carries with it an . obligation on the part of the owner of the land to convey title to it upon the fulfilment of certain conditions. Such contracts are usually transferable, and before delivering a deed, the owner should receive back the original contract in order to insure him against a subsequent claim thereunder. If this contract is lost, the purchaser should give a written undertaking stating that the deed is received in completion of the said contract, and absolving the owner from all further liability. It is a safe practice to insert in such a deed a clause stating that it is issued in accordance with the terms of a specified contract, especially when the original contract has been transferred by the original purchaser, who might, in some states, present a claim against the vendor.
It should be noted, however, that the custom of returning the original contract to the owner is by no means universal, and where the custom does not exist, it is obvious that the above precautions do not apply.