Crucial Exams

Multistate Bar Examination Practice Question

A buyer and seller enter into a valid contract for the sale of a commercial property. Before the closing date, a severe storm damages the property. At the time of the storm, legal title remained with the seller, but equitable title had passed to the buyer under the doctrine of equitable conversion. The jurisdiction adheres to the majority rule regarding risk of loss. Who bears the risk of damage to the property resulting from the storm?

  • The buyer bears the risk of loss because possession of the property had been transferred to the buyer prior to closing.

  • The seller bears the risk of loss because legal title had not transferred to the buyer at the time of the storm.

  • Both the buyer and seller share the risk of loss equally since the damage occurred before legal title passed.

  • The buyer bears the risk of loss because equitable title transferred to the buyer at contract signing.

Multistate Bar Examination
Real Property
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