The Question(s)

Francis Morelli agreed to sell Judith Bucklin a house in Rhode Island for $ 177,000.00. The sale was supposed to be closed by September 1. The contract included a provision that "if the Seller is unable to convey good, clear, and marketable title, Buyer shall have the option to: (a) accept title as Seller is able to convey without reduction to the Purchase Price, or (b) cancel this Agreement and receive return of all Deposits."

An examination of the public records revealed that the house did not have marketable title. Bucklin offered Morelli additional time to resolve the problem, and the closing did not occur as scheduled. Morelli decided that "the deal was over" and offered to return the deposit. Bucklin refused and in mid-October, decided to exercise his option to purchase the house without marketable title. She notified Morelli, who did not respond. Bucklin then filed a suit against Morelli in state court.

1. What is the contract provision relating to the seller's inability to convey good and marketable title called?

2. Did Morelli breach the contract in failing to respond to Bucklin's decision to purchase the house without marketable title?

3. What would prompt Bucklin to exercise her option to purchase the house absent the seller's ability to provide a marketable title?