A real estate contract containing warranties not normally found in a deed is not extinguished based on merger.
Plaintiff buyer entered into a contract for sale of real property with defendant seller, wherein the contract contained a warranty regarding water, sewer and electric services. Prior to closing, plaintiff learned that the conditions were not as warranted, but proceeded to close with a deed which did not contain the warranties found in the original contract. Plaintiff filed an action attempting to invoke those warranties after the sale, but the trial court found for defendant. Plaintiff appeals the trial court's decision.
Did plaintiff have the right to invoke the warranties from the original contract when plaintiff failed to invoke the warranties before the merger?
The court reversed the decision, holding that the real estate contract contained warranties which are not usually included in the terms of a deed, and therefore the contract was not affected by the merger rule. The court also held that plaintiff did not waive his right to enforcement of the warranties by not objecting at closing because plaintiff reasonably relied on the original contract and would have expected defendant to live up to the warranty after closing.