The open contract rules are the rules of property law that are created down the ages by common law or statute. Where the provisions of the contract for sale make no reference to a particular, the rules and statute come in. If the date for the completion is not mentioned in the contract, then it will follow the open contract rule, wherein according to the open contract rule, the completion of the contract shall take place within a considerable period. According to the open contract, the seller is supposed to disclose in the contract all latest encumbrances and defects in the title. A caveat emptor has to be filed in order to find out the physical defects of the property in question. However, if a physical defect is concealed willfully, then it might give rise to an action in the tort of deceit. In a contract, if there is a breach of contract on the part of the seller’s duty of disclosure, then the purchaser will normally be permitted to rescind the contract and claim damages If an encumbrance is not apparent from the from an inspection of the property, then it is known as a latent encumbrance. It is the advocate’s duty to ensure that all non-physical defects and encumbrances, that are known to the seller be disclosed in the contract. This also includes matters that are apparent from an inspection of the title deeds. Thus the seller’s advocate should do a thorough search of the property.
