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Applying Merger By Deed Doctrine to Real Estate Transactions
Under the doctrine of merger by deed, certain terms, covenants and conditions of a contract for the sale of real property are merged with and into the deed to the property upon delivery. Based on the common law doctrine of caveat emptor, merger by deed provides a sense of finality to the transaction process. Since a deed is a subsequent writing between the parties, there is some logic to the terms of the deed taking precedence over the terms of the prior contract of sale, at least as to the subject matter of the deed.
Taken to an extreme, the merger doctrine mandates that prior agreements made between buyer and seller are superseded by the terms of the deed, so that the deed (along with other agreements delivered at closing) stands alone as the sole source of legally enforceable obligations between buyer and seller. Most sophisticated contracts of sale contain representations, warranties and covenants that are far broader than the subject matter of a deed, though, so the doctrine of merger by deed can result in unintended consequences.
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