Question

Cassidy purchased one of 30 lots in a subdivision and signed a sales contract which stated, "No purchaser of a lot in this subdivision shall erect a 'for sale' sign on his lot until all of the lots owned by the subdivider are sold." If Cassidy wants to sell his lot before the subdivider has sold all of his lots, he may:

A) Not erect a 'for sale' sign because of the statement in the sales contract
B) Erect a 'for sale' sign of reasonable dimensions because the statement in the sales contract is declared by law to be void
C) Erect a 'for sale' sign of any dimension to get the best results because the statement in the sales contract is a restraint of trade
D) Not erect a 'for sale' sign without being held liable by the seller

Answer 1

Cassidy may not erect a 'for sale' sign on his property because the sales contract he signed contains a restrictive covenant disallowing it until the subdivider has sold all his lots, and violating this could lead to legal liabilities. The correct answer is A

Step-by-step explanation:

If Cassidy wishes to sell his lot before the subdivider has sold all of his lots, according to the sales contract he signed which includes a restrictive covenant, he may: A) Not erect a 'for sale' sign because of the statement in the sales contract. This contract stipulates the conditions under which a property may be sold, and one of the conditions is that no 'for sale' signs can be erected until all the lots owned by the subdivider are sold. Restrictive covenants are legally enforceable agreements that are used to control the use of the land; they can limit the property's use, and property owners are typically bound by them when they decide to purchase the property. Therefore, violating this covenant may lead Cassidy to legal liabilities with the seller.