Final answer:
The question relates to breach of contractual rights in a real estate transaction, specifically involving the conveyance of appurtenant water rights and the use of escrow. The seller's transfer of water rights before the sale's closing may have breached the implied covenant in the grant deed, potentially entitling the buyer to seek damages.
Step-by-step explanation:
The question deals with the concept of contractual rights within the field of property law, particularly focusing on the issue of appurtenant water rights that accompany real estate. Contractual rights ensure that individuals have legal recourse if agreements related to their property are breached. In real estate transactions, such as the one described, these rights are critical, as they affirm the ability of property owners to enter into contracts that are legally binding. An example of this is an easement, which allows the use of another's property for a specific purpose. If a seller conveys appurtenant water rights to a new party, that may constitute a breach of the implied covenant against previous conveyances, and the affected buyer may seek compensation. The situation described also involves the use of an escrow service to facilitate the transfer of property, another common practice in real estate transactions. In this scenario, the critical point is whether the buyer's rights to the water rights were violated due to the seller's actions before the actual closing of the sale.