Question

The grantor warrants that he or she owns the property and has the right to convey title to it. The grantee may recover damages up to the full purchase price if this covenant is broken. What is the purpose of the grantor's warranty in this scenario?

1) To ensure that the grantee is protected in case the grantor does not own the property
2) To ensure that the grantor receives the full purchase price from the grantee
3) To ensure that the grantor is not held responsible in case the property is damaged
4) To ensure that the grantee cannot recover any damages in case the covenant is broken

Answer 1

The grantor's warranty is in place to protect the grantee if the grantor does not have the legal right to the property, potentially allowing the grantee to recover the full purchase price in damages.

Step-by-step explanation:

The purpose of the grantor's warranty in the scenario described is to ensure that the grantee is protected in case the grantor does not own the property. This warranty acts as a guarantee that the grantor indeed has the right to convey title to the property and that there are no other claims or encumbrances on the property that would impair the grantee's ownership. If this covenant is breached, meaning the grantor did not have the legal right to sell the property, the grantee can recover damages up to the full purchase price.