The trial court awarded damages for third-party property loss on purchasers of real estate before closing. Where a contract places the risk of loss on the vendor, the purchaser may recover the down payment. Where a contract places the risk of loss on the vendor, the purchaser may recover the down payment. If the contract allocates the risk of loss, then the doctrine of equitable conversion does not apply. Reversed and remanded.
Equitable conversion provides that the risk of loss is on a purchaser where a contract is executory.
That is because the purchaser is deemed to hold equitable title. Modern law permits the risk of loss to be assigned in the contract . RISK OF LOSS - Liability for damage to or loss of property that is the subject matter of a contract for sale. Inc. Do not copy or duplicate without permission from the publisher.