Bar Exam (Next Generation) Quiz: Marketability Of Title

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Marketability Of TitleQuestion 1 of 11

A seller contracted to sell a house for $500,000, promising to deliver marketable title free of encumbrances. At the time of contracting, the property was encumbered by a recorded mortgage with an outstanding balance of $300,000, and the seller made clear that the sale would close through a title company that would use part of the purchase price to pay off and discharge the mortgage at closing. On the closing date, before the deed was delivered, the buyer refused to close, insisting that the recorded mortgage made the title unmarketable.

Which of the following is the most accurate statement of the parties' rights?

The buyer may refuse to close because marketability is determined at the contract date, and the mortgage existed then.

The buyer may refuse to close because, until the mortgage is actually released of record, the buyer cannot be compelled to accept the risk that the title company will fail to obtain the discharge.

The seller may require the buyer to close because a purchase-money mortgage is never deemed an encumbrance when the seller has agreed to pay it off at closing.

The seller may require the buyer to close because title need be marketable only at closing, and a seller may discharge a mortgage out of the closing proceeds so long as the release is tendered with the deed.

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Bar Exam (Next Generation) Quiz

Bar Exam (Next Generation) Quiz: Marketability Of Title

Practice Marketability Of Title in Bar Exam (Next Generation) with focused quiz questions that help you check what you know, review explanations, and build confidence with test-style prompts.

What this quiz covers

This quiz focuses on Marketability Of Title, giving you a quick way to practice the rules, question types, and explanations that matter most for Bar Exam (Next Generation).

How to use this quiz

Try each quiz question before looking at the correct answer. Use the explanations to review missed ideas, then come back to similar questions until the pattern feels familiar.

All questions

Question 1

Which of the following is the most accurate statement of the parties' rights?

The buyer may refuse to close because marketability is determined at the contract date, and the mortgage existed then.
The buyer may refuse to close because, until the mortgage is actually released of record, the buyer cannot be compelled to accept the risk that the title company will fail to obtain the discharge.
The seller may require the buyer to close because a purchase-money mortgage is never deemed an encumbrance when the seller has agreed to pay it off at closing.
The seller may require the buyer to close because title need be marketable only at closing, and a seller may discharge a mortgage out of the closing proceeds so long as the release is tendered with the deed. (correct answer)

Explanation: Whenever you see a marketable-title question, remember the key timing rule: marketability is judged at closing, not when the contract is signed. A title is marketable if the seller can tender, at closing, a title free from reasonable doubt — and a mortgage that will be paid off and released out of closing proceeds does not make title unmarketable. So here, the buyer must close if the seller is ready to use part of the purchase price to discharge the recorded mortgage and tender the release with the deed. The buyer cannot refuse merely because the mortgage was on record before closing; what matters is the condition of title at the moment of delivery. The statement that the buyer may refuse because marketability is determined at the contract date misstates the law — defects existing at contract date can be cured by closing. Likewise, the worry that the title company might fail to obtain the discharge is not a valid objection; the seller's obligation is to tender marketable title at closing, and the buyer need not accept a speculative risk if the seller actually performs. Finally, the claim that a purchase-money mortgage is never deemed an encumbrance is both overbroad and irrelevant — this was a pre-existing mortgage, not a purchase-money mortgage, and any mortgage remaining of record would ordinarily make title unmarketable. Study tip: on real-property questions, separate the "what exists now" from "what will exist at closing." Temporary clouds that can be cleared by the seller at closing usually do not justify the buyer's refusal to perform.

Question 2

A buyer contracted to purchase a house from a seller. The seller's title search showed the following recorded instruments concerning the property over the past 30 years: (1) a deed from Owner to Adams, recorded in 1998; (2) a deed from Brown to Carr, recorded in 2001; (3) a deed from Carr to the seller, recorded in 2002. No deed from Adams to Brown appears anywhere in the land records. The deed from Brown to Carr recites that Brown acquired the property from Adams, but no such deed is recorded and its execution cannot be verified.

Which of the following is the most accurate characterization of the seller's title?

The title is marketable because the 30-year search period reveals no recorded defect and Carr had record title for more than a year before conveying to the seller.
The title is unmarketable because the chain of title has a missing link and the gap creates a reasonable doubt that the seller owns the property. (correct answer)
The title is unmarketable only if the missing deed from Adams to Brown was recorded before Brown's deed to Carr, because a late-recorded deed would be a wild deed.
The title is marketable because Brown's deed to Carr, being recorded, cures the prior absence of a record link, and a purchaser must search only from the root of title forward.

Explanation: Whenever you see a marketable-title question, remember that the issue is not just actual ownership—it is whether a reasonable purchaser, examining the record, would be forced to litigate over the title. Here the recorded chain is Owner → Adams (1998), Brown → Carr (2001), Carr → seller (2002), but there is no Adams → Brown deed. That missing link is a visible gap in the chain of title. A buyer cannot verify how Brown ever acquired the property, so the seller's title is unmarketable because the gap creates a reasonable doubt that the seller owns the property. The choice saying the title is marketable because the 30-year search reveals no recorded defect ignores that the missing link is itself the defect; Carr's one year of record title does not cure it. The choice limiting unmarketability to a late-recorded wild deed is backwards: if the Adams-to-Brown deed were recorded before Brown-to-Carr, the chain would actually be complete. The choice claiming Brown's recorded deed cures the prior absence of a link misunderstands recording—a deed can be recorded, but without a connecting grantor it hangs in the air, and a purchaser must search the whole chain forward from the root of title, not ignore an unconnected deed. Study tip: draw the chain whenever you see recording facts. A broken link between any two deeds makes title unmarketable, even if the current deed is recorded.

Question 3

A seller has occupied a parcel of land as a residence for the past 22 years. The seller has no deed or other written evidence of ownership in the chain of title; she obtained possession through a long-ago verbal gift from a neighbor who never executed a deed. The seller's possession has been open, notorious, continuous, exclusive, and adverse under the applicable 15-year statute. The seller now enters into a contract to sell the parcel, promising to deliver marketable title. The buyer, having found no record title in the seller, refuses to close.

Is the buyer obligated to close, and why?

No, because title by adverse possession is not marketable of record and would expose the buyer to the burden of proving title in litigation. (correct answer)
No, because title by adverse possession can never be conveyed, as a seller cannot transfer what the true record owner holds.
Yes, because title by adverse possession is a valid legal title once the statute has run, and the seller's 22-year possession is conclusive proof of it.
Yes, because the buyer's obligation to close depends only on physical possession and the seller's ability to deliver possession at closing.

Explanation: Whenever you see a contract promising "marketable title," you're testing the distinction between legal title and title a reasonable buyer must accept. Marketable title must be free from reasonable doubt and proven from the record, not just by the seller's assertion. Here, the seller has 22 years of adverse possession, exceeding the 15-year statute, so she has valid legal title. However, because she has no deed or recorded chain of title, the buyer cannot verify her ownership without litigating. The correct answer is the one that says "No, because title by adverse possession is not marketable of record and would expose the buyer to the burden of proving title in litigation." The title is good, but it is not marketable, and forcing the buyer to accept it shifts the risk of litigation onto the buyer. Now, examine the wrong answers. The choice saying "title by adverse possession can never be conveyed, as a seller cannot transfer what the true record owner holds" is incorrect because adverse possession extinguishes the record owner's title; the possessor can convey her title, but the problem is lack of record evidence, not transferability. The choice saying "Yes, because title by adverse possession is a valid legal title once the statute has run, and the seller's 22-year possession is conclusive proof of it" misstates the law – valid title does not equal marketable title, and "conclusive proof" is what the buyer lacks. Finally, the choice saying "Yes, because the buyer's obligation to close depends only on physical possession and the seller's ability to deliver possession at closing" is wrong because marketable title requires record title, not just possession; possession doesn't cure the title defect. Study tip: Remember that "marketable title" is a record-based concept. A seller with adverse possession has a valid claim, but it is unmarketable because the buyer would have to prove it in court. Watch for this trap – the exam loves to test that legal title is not the same as marketable title.

Question 4

A buyer entered into a contract to purchase a house, with the seller warranting that title would be marketable. The buyer's title search disclosed that the seller's neighbor's driveway encroached 14 inches onto the seller's lot and that the encroachment had existed for over 20 years. The driveway was plainly visible. The buyer, who planned to build a fence along the boundary, refused to close, citing the encroachment and the possibility that the neighbor had acquired prescriptive rights.

Which of the following is the most accurate statement regarding the buyer's obligation to close?

The buyer must close because a visible encroachment does not render title unmarketable; the buyer is charged with notice of what is apparent on the ground. (correct answer)
The buyer must close only if the seller can obtain from the neighbor a written acknowledgment that the encroachment is permissive.
The buyer may refuse to close because any encroachment by a third party's structure onto the property is an encumbrance that creates reasonable doubt about title.
The buyer may refuse to close because the possible existence of a prescriptive easement in the neighbor prevents the seller from conveying record title.

Explanation: Whenever you see a marketable-title question, ask whether the alleged defect is hidden or visible. A title is marketable if it is free from reasonable doubt, but it need not be perfect. Here, the driveway encroachment was plainly visible for over 20 years. Because the buyer was charged with notice of what appears on the ground, he cannot later claim that the visible encroachment casts reasonable doubt on title. The mere possibility that the neighbor has acquired prescriptive rights doesn't make the title unmarketable; the buyer contracted knowing the property's physical condition. The statement that the buyer must close only if the neighbor gives a written acknowledgment of permissive use is wrong—that would be a possible cure for a hidden encroachment, but this one was not hidden. Likewise, the broad claim that any third-party encroachment creates reasonable doubt goes too far; a minor, visible encroachment is not a title defect. And the suggestion that the seller cannot convey record title because of a possible prescriptive easement confuses a physical condition with a title defect—the seller can convey whatever record title he has, and the buyer's visible knowledge bars a marketability objection. Remember: visible encroachments are assumed to be accepted by the buyer. On the exam, separate hidden title defects from open-and-notorious physical conditions.

Question 5

A seller's parcel was subject to a recorded instrument by which a prior owner had conveyed the parcel to a church 'so long as the premises are used for church purposes, and if they cease to be so used, the grantor or his heirs may re-enter and terminate the estate.' The property later passed to the seller, who uses it as a church. The buyer, who intends to continue the church use, refused to close, claiming that the future interest held by the grantor's descendants made the title unmarketable. The seller responded that the retained interest was a mere technical interest that does not affect marketability.

Which of the following is the most accurate statement of the law applicable to the buyer's claim?

The buyer's claim fails because the grantor's interest is a mere possibility of reverter, which is too remote and speculative to render title unmarketable.
The buyer's claim fails because the buyer intends to continue the permitted church use, so there is no realistic possibility of forfeiture.
The buyer's claim succeeds because an instrument that restricts the use of property is always an encumbrance, irrespective of whether the condition has been or will be breached.
The buyer's claim succeeds because the grantor retained a right of entry, an enforceable future interest that renders the title unmarketable. (correct answer)

Explanation: When you see a deed with conditional language, your first job is to classify the future interest—that classification drives marketability. Here, the clause "if they cease to be so used, the grantor or his heirs may re-enter and terminate" explicitly grants the grantor a right of entry (power of termination). This makes the seller's estate a fee simple subject to condition subsequent. A right of entry is a present, enforceable future interest that allows the holder to reclaim the property upon breach. It is a genuine encumbrance on title, so a reasonable buyer cannot be forced to accept it—even if the buyer currently plans to continue the church use. The buyer's claim therefore succeeds. The choice claiming the grantor's interest is a "mere possibility of reverter" is wrong on two counts: the "may re-enter" language creates a right of entry, not the automatic termination that accompanies a possibility of reverter (which arises from "so long as" alone). Even if it were a possibility of reverter, that interest is also an encumbrance, so it would not be "too remote." The choice about the buyer's intent to continue the church use misses the point—marketability is judged objectively, from the standpoint of a reasonable purchaser, not the specific buyer's plans. The risk of future breach and litigation is enough. Finally, the choice that says a use restriction is "always an encumbrance" is overbroad; zoning laws, for example, are not encumbrances. But here, the specific enforceable future interest is what matters. Study tip: On the bar exam, distinguish a right of entry (explicit "re-enter" or "terminate" language) from a possibility of reverter (automatic termination). Both make title unmarketable, but you must label them correctly to pick the right answer.

Question 6

A seller and buyer entered into a contract for the sale of a house, with the seller promising to deliver marketable title. At the time of contract, the house was subject to a recorded building restriction limiting construction on the lot to one residence, a restriction the seller had violated by adding a second dwelling unit. The buyer knew of the restriction before signing. Before closing, the buyer refused to proceed, asserting the existing violation made title unmarketable. The seller offered to cure by obtaining from the homeowners' association a written waiver of the restriction applicable only to the current dwelling, but the buyer rejected the offer.

Which of the following is the most accurate statement regarding the seller's proposed cure?

The seller's waiver offer is sufficient because the buyer's knowledge of the restriction at contract time prevents the buyer from later objecting on marketability grounds.
The seller's waiver offer is sufficient because a waiver cures the violation and a buyer must accept any offer that removes the actual risk of enforcement.
The seller's waiver offer is insufficient because it is limited to the current dwelling and does not run with the land, so a future owner would remain exposed to enforcement for the existing violation. (correct answer)
The seller's waiver offer is insufficient because buyer's knowledge of the restriction at contract time is irrelevant, and any waiver that is not signed by every lot owner in the subdivision is ineffective.

Explanation: When you see a marketability-of-title question, remember that the seller's obligation is measured at closing, not by what the buyer knew when signing. A title is unmarketable if it exposes the owner to litigation or reasonable doubt, and a recorded building restriction that has been violated ordinarily makes title unmarketable. The seller's proposed cure fails for a simple reason: theomeowners' association waiver applies only to the current dwelling and does not run with the land. That leaves a future purchaser — and therefore the buyer as a future seller — exposed to enforcement of the restriction for the existing second dwelling unit. Because marketable title must be marketable to future owners, not just the immediate buyer, this personal, non-assignable waiver does not remove the title defect. The buyer's knowledge of the restriction before signing does not waive the right to insist on marketable title; knowing about a defect is not the same as agreeing to accept it, so that rationale is insufficient. Similarly, while a valid waiver can sometimes cure a violation, it must actually run with the land or otherwise bind future owners; the buyer is not required to accept just any offer that purportedly reduces risk. Finally, the suggestion that the waiver is ineffective unless signed by every lot owner is too absolute: a homeowners' association may be authorized to grant effective waivers under the declaration, so universal owner signatures are not automatically required. The real test is whether the cure eliminates the exposure for succeeding owners. For marketability problems, ask: does this cure bind only the current party, or does it travel with the land? If it does not run with the land, it is usually not enough.

Question 7

A buyer agreed to purchase a commercial lot, with the contract requiring the seller to convey marketable title. A city utility line runs beneath the lot to serve a neighboring public school. The utility company's recorded easement grants it 'the right to install, maintain, and repair underground pipes and cables across the property.' The line is entirely underground, and there is no visible evidence of it on the surface. The buyer had no actual knowledge of the easement when the contract was signed and did not learn of it until the title report was issued. The buyer refused to close, asserting that the easement renders the title unmarketable.

Is the buyer's refusal justified?

No, because utility easements are presumed to be within the contemplation of all purchasers and are not encumbrances for marketability purposes.
No, because the seller has a marketable title so long as the easement does not occupy any portion of the above-ground improvements or prevent the buyer's intended use.
Yes, because an easement that is not visible and of which the buyer had no actual knowledge at the time of contracting is an encumbrance that creates reasonable doubt and renders title unmarketable. (correct answer)
Yes, because any recorded easement automatically renders title unmarketable unless the contract expressly stated that the sale was subject to existing easements of record.

Explanation: Whenever a sale contract requires marketable title, focus on whether the title is free from encumbrances that would create reasonable doubt in a prudent buyer. An easement is such an encumbrance even if it leaves no surface trace. Here, the city's recorded right to install, maintain, and repair underground pipes across the lot gives a third party ongoing access to the property. Because the line is entirely underground and the buyer did not actually know of the easementat signing, he never agreed to accept this burden; discovering it later in the title report does not make the title marketable. His refusal is therefore justified. The blanket idea that utility easements are presumed within every purchaser's contemplation goes too far; common burdens may be acceptable when known/visible, but an invisible, unknown easement can create risk of future entry, excavation, and litigation. Likewise, it is no answer that the easement does not occupy above-ground improvements or prevent the buyer's intended use; marketability concerns title risk, and the utility's right to dig/maintain can interfere with many uses. Finally, the claim that any recorded easement automatically renders title unmarketable unless the contract expressly says "subject to existing easements"is overbroad; visible or known encumbrances may be accepted or may not create reasonable doubt, and the standard is reasonable doubt, not a bright-line rule. Study tip: at signing, ask whether the buyer observed or actually knew of the encumbrance. If not, a recorded hidden encumbrance generally justifies refusal; if yes, the buyer likely took subject to it.

Question 8

A seller contracted to convey a waterfront lot to a buyer. A title search revealed that, 40 years ago, the seller's predecessor had granted the state a recorded conservation easement prohibiting any construction within 50 feet of the waterline. The buyer's survey showed that the seller's existing boat dock, constructed by the predecessor 20 years ago, extends 12 feet into the prohibited setback, in violation of the easement. The buyer refused to close, and the seller offered no evidence that the violation had been cured or waived.

Which of the following is the most accurate statement of the buyer's rights?

The buyer must close because the conservation easement is an encumbrance of which the buyer had record notice, and the dock is a minor violation that does not affect marketability.
The buyer must close unless the buyer can show that the state has actually threatened to enforce the easement against the property.
The buyer may refuse to close only if the dock physically interferes with the buyer's ability to use the portion of the lot within the 50-foot setback.
The buyer may refuse to close because the dock's violation of the recorded easement exposes the buyer to a substantial risk of enforcement and renders the title unmarketable. (correct answer)

Explanation: Whenever you see a buyer refusing to close because of a title defect, focus on marketable title. A title is unmarketable if it exposes the buyer to a substantial risk of litigation or enforcement. Here, a recorded conservation easement prohibits construction within 50 feet of the waterline, and the existing dock violates it by 12 feet. The seller offered no evidence of a cure or waiver, so you face a real risk that the state will enforce the easement, potentially forcing dock removal. That risk makes the title unmarketable, so you may refuse to close. The choice saying you must close because you had record notice is wrong—record notice does not excuse a known violation; it simply tells you the easement exists. The violation itself, regardless of physical size, is a title defect. The choice requiring you to prove the state actually threatened enforcement is also wrong; marketability is judged by reasonable risk, not actual threat. The choice limiting refusal to physical interference with the setback is flawed too—the defect is the violation of the easement, not the degree of interference. Even if you could still use the land, the legal risk is enough. Remember: a recorded restriction that is violated makes title unmarketable unless the seller proves it was cured or waived. Don't wait for an actual lawsuit—the risk is sufficient.

Question 9

A buyer entered into a contract to purchase a house, with the seller promising to deliver marketable title. The house lies in a subdivision whose recorded declaration contains a covenant providing that all lots 'shall be used exclusively for residential purposes.' The buyer later learned that a final court judgment had held the covenant unenforceable because it was adopted as part of a racially discriminatory scheme. At closing, the buyer refuses to close, claiming the covenant renders the title unmarketable.

Which of the following is the most accurate statement of the buyer's position?

The buyer must close because an unenforceable restriction does not create a reasonable doubt about title and therefore does not render title unmarketable. (correct answer)
The buyer may refuse because the covenant remains in the chain of title and a reasonable purchaser would not accept a title that requires reliance on a court judgment to establish its validity.
The buyer may refuse because any recorded covenant that purports to restrict use renders title unmarketable until it is removed from the record.
The buyer may refuse because the covenant was recorded and the buyer cannot be required to accept property burdened by a restriction that cannot be eliminated.

Explanation: Whenever you see a marketable-title question, focus on whether a reasonable purchaser would face a genuine risk of litigation or loss, not on whether the record contains imperfections. Here, the recorded covenant would normally be a concern, but a final court judgment held it unenforceable because it was adopted as part of a racially discriminatory scheme. That judgment is public record and eliminates the covenant's legal effect. Because an unenforceable restriction cannot create a reasonable doubt about title, the buyer must close. The choice saying the covenant remains in the chain of title and a reasonable purchaser would not accept a title requiring reliance on a court judgment is wrong: recorded court judgments routinely remove restrictions, and relying on them is not the kind of doubt that makes title unmarketable. The choice saying any recorded covenant purporting to restrict use renders title unmarketable until removed is too broad — only enforceable restrictions matter. And the choice saying the buyer cannot be required to accept property burdened by a restriction that cannot be eliminated confuses a void document with a real burden; since the covenant is unenforceable, there is no burden to eliminate. Study tip: distinguish record clutter from title defects. If the restriction is void, it does not cloud title. Ask whether a reasonable buyer would have a substantial risk of suit — if not, the title is marketable.

Question 10

A seller owned a house subject to a recorded homeowners' association covenant stating that no lot may be used 'other than for single-family residential purposes.' The buyer, knowing of the covenant, contracted to purchase the house for use as a single-family residence. Before closing, the buyer demanded that the seller remove the covenant from the record, arguing that the covenant rendered title unmarketable. The seller refused, noting that the buyer's intended use complied fully with the restriction.

Which of the following best states the buyer's right with respect to the covenant?

The buyer may refuse to close because any recorded covenant restricting the use of property is an encumbrance that makes title unmarketable despite the buyer's intended use.
The buyer may refuse to close because the covenant could be enforced against future owners and therefore exposes the buyer to the risk of a lawsuit even if the buyer's current use complies.
The buyer must close because a covenant that does not interfere with the buyer's actual intended use does not create a reasonable doubt as to the title's validity. (correct answer)
The buyer must close because a purchaser who has actual knowledge of a recorded covenant is deemed to have waived any objection based on it.

Explanation: This question tests the distinction between an encumbrance and a marketable title defect. Under the marketable title doctrine, a title is unmarketable if a reasonable purchaser, aware of the facts, would be exposed to litigation or substantial risk. A recorded covenant is an encumbrance, but it only renders title unmarketable if it materially interferes with the buyer's intended or reasonable use. Here, the covenant restricts use to single-family residential purposes, and the buyer's intended use is precisely that. Because the restriction does not impede the buyer's plans, it creates no reasonable doubt about the title's validity, so the buyer must close. The choice stating that any recorded covenant restricting the use of property is an encumbrance that makes title unmarketable is overbroad; not every restriction creates a defect, only those that hinder the buyer's use or expose them to suit. The choice arguing the covenant could be enforced against future owners misstates the test—marketability is judged at closing based on the buyer's current intended use, not speculative future violations. Finally, the choice claiming the buyer waived any objection due to actual knowledge is incorrect; knowledge of a covenant does not waive a genuine marketability objection, but here no such objection exists because the use complies. On the exam, when you see a covenant and marketability, ask: Does the restriction block the buyer's stated or planned use? If it does not, the buyer must close. If it does, the title is unmarketable.

Question 11

Seller and Buyer signed a written contract for the sale of a house. The contract contained the standard promise that Seller would deliver marketable title at closing. At closing, Seller tendered a warranty deed and Buyer accepted it and paid the full price. One week later, Buyer learned that an unreleased mortgage, recorded three years earlier, was still shown as a lien against the property. Buyer now sues Seller for breach of the contract's marketable-title clause, seeking damages for the cost of obtaining a release.

Which of the following is the most accurate statement of Buyer's rights?

Buyer may recover because the recorded mortgage rendered Seller's title unmarketable and the contract promise was breached at closing.
Buyer may not recover on the contract claim, but Buyer may sue on the covenants of the warranty deed for the cost of clearing the lien. (correct answer)
Buyer may recover only if Buyer can prove that Seller knew of the unreleased mortgage and intentionally concealed it.
Buyer may not recover unless the unreleased mortgage was in default at the time of closing, because a paid mortgage does not affect marketability.

Explanation: When you see a real estate transaction with both a contract and a deed, think about the doctrine of merger: at closing, the contract merges into the deed. That means the buyer's rights are generally limited to the covenants in the deed, not the contract's marketable-title promise. Here, the unreleased mortgage is an encumbrance on the title. The warranty deed Seller delivered includes a covenant against encumbrances, which is breached at the moment of delivery—regardless of whether Seller knew about the mortgage or whether it was in default. So Buyer can recover the cost of obtaining a release by suing on that covenant, but not on the contract claim because the contract is gone after closing. The first wrong answer, "Buyer may recover because the recorded mortgage rendered Seller's title unmarketable and the contract promise was breached at closing," ignores merger—the contract promise does not survive the deed. The third, "only if Seller knew and intentionally concealed it," misstates the law: the covenant against encumbrances is strict liability, not knowledge-based. The fourth, "unless the unreleased mortgage was in default," is also wrong—a paid but unreleased mortgage still creates a cloud on title and breaches the covenant. The correct answer is the one that distinguishes the contract claim from the deed covenants. Study tip: Whenever both a purchase contract and a deed appear, check for merger. Ask yourself: "What did the deed warrant?" That will often point you to the correct remedy.