purchase price in addition to the money already paid into escrow. Bishop the escrow agreement was merely a preliminary agreement • argued “that to a contract the major terms of which were to be supplied by the supplemental Bishop argued that without the supplemental instructions.” Basically, instructions, there was no contract. Decision: The court stated that contract of sale of real estate and an escrow agreement • “a are not interchangeable entities.” The court summarized escrow as conveyancing device designed to carry out • “a the terms of a binding contract of sale previously entered into by the parties.” The court did not find that the contract of sale conditioned upon • “was expressly the completion of escrow instructions.” To summarize, the court stated that while the escrow agreement itself had not • been completed due to the failure of the parties to agree upon and submit the necessary supplemental instructions, the contract itself did not set forth the requirement of these supplemental instructions as a condition of the binding agreement between the parties. The Appellate Court reversed the judgment of the trial court (which had found in • favor of the defendant, Bishop.) Discussion: How would the situation have changed if the requirement for • supplemental escrow instructions had been included in the original contract? What is the significance of the definition of escrow as • court’s “a conveyancing device…”? How can you apply the lesson here to your daily practice to reduce • risk and liability for yourself and your client? Notes:
purchase price in addition to the money already paid into escrow. • Bishop argued “that the escrow agreement was merely a preliminary agreement to a contract the major terms of which were to be supplied by the supplemental instructions.” Basically, Bishop argued that without the supplemental instructions, there was no contract. Decision: • The court stated that “a contract of sale of real estate and an escrow agreement are not interchangeable entities.” • The court summarized escrow as “a conveyancing device designed to carry out the terms of a binding contract of sale previously entered into by the parties.” • The court did not find that the contract of sale “was expressly conditioned upon the completion of escrow instructions.” • To summarize, the court stated that while the escrow agreement itself had not been completed due to the failure of the parties to agree upon and submit the necessary supplemental instructions, the contract itself did not set forth the requirement of these supplemental instructions as a condition of the binding agreement between the parties. • The Appellate Court reversed the judgment of the trial court (which had found in favor of the defendant, Bishop.) Discussion: • How would the situation have changed if the requirement for supplemental escrow instructions had been included in the original contract? • What is the significance of the court’s definition of escrow as “a conveyancing device…”? • How can you apply the lesson here to your daily practice to reduce risk and liability for yourself and your client? Notes:
Essential-Skills-FINAL-9_2015.docx