Question
Buyer and Seller enter a contract for the purchase and sale of a single family residential home.As a condition of purchase, Buyer drafts a contract
Buyer and Seller enter a contract for the purchase and sale of a single family residential home.As a condition of purchase, Buyer drafts a contract term to deal with inspection of the house for any defects.The parties agree on language that they put in their contract.The contract provision reads as follows:
"Purchaser reserves the right to have the Property inspected.All inspections shall be made within 10 business days of the date of this contract.Inspections shall be at the cost of the Purchaser and shall be made by qualified and licensed inspectors and contractors within this state.Inspections may include but are not limited to hearing, cooling, electrical, plumbing, roof, walls ,ceilings, floors, foundation, basement, crawl space, well, septic, water analysis, and wood eating infestations.If the Purchaserdoes not make a written objection within 17 business days from the date of this contract, Purchaser will be deemed to have accepted the Property.Objections must be accompanied by copies of the written inspection reports.If an inspection report reveals a major problem with the Property, the Seller can either fix the problem at its own expense or if Seller elects not to fix the problem, either party can terminate the contract"
(a)Under the contract in this case, the price of the house is $150,000.Buyer has an inspection done, and it is reported that there is a leak in the roof, termite damage to a structural beam and a wet area in the basement.The estimated cost to repair all these items is $1000.Under the inspection provision of the contract, should Buyer be able to terminate this contract?
(b)If Buyer mails a written objection to Seller on the 16thbusiness day after entering the contract but it is not delivered to Seller until the 19thbusiness day, is it an effective objection?
(c)Assume that Buyer submits a timely objection to Seller.The objection is based on a termite inspection that reports damage to a roof support bean and recommends replacement of the beam at a cost or $700.On receipt of this objection, Seller hires a separate and qualified and licensed inspector who reports evidence of prior termite activity in the identified beam but goes on to say that the activity is old and has left the beam structurally sound.Consequently, Seller's inspector concludes that the beam is not in need of replacement or repair.Seller presents its report to Buyer, refusesto make a repair and insists that Buyer close on the contract.What results?
(d)Assume a wintertime transaction in Minnesota with freezing temperatures.The house inspector informs Buyer that the air conditioning system cannot be tested without risk of serious damage when outside temperatures are below 50 degrees Fahrenheit.Buyer goes forwardwith the contract and closes on the deal in March.By June, the outside temperature is warm enough to try out the central air conditioning and Buyer learns for the first time that the system does not work.What do you think Buyer can do or shouldbe able to act at this point?How could Buyer have protected himself under the terms of the inspection provision as written?
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