Monday, January 29, 2007

The old "Merger Doctrine"...

Interesting case that just came down from the 4th District Appellate Court here.

Facts were that the parties just had a plain, old vanilla real estate closing with a 105% real estate tax credit given to Buyers by Sellers at closing. The 105% was computed off the most recent full year's ascertainable tax bill. It turned out that the credit was computed based on a PARTIAL year's bill...this was critical. As we recall from first year property class, normally, you can't bring breach of contract actions post-closing because the contract "merges" into the deed.

However, here the parties had relied on mistaken information...i.e. that the tax bill was not for a the most FULL year. So, the mutual mistake of fact pleading ruled. Case remanded to trial court.

Look at your contract proration language...it does typically say "full year."

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