Also known as: sale proceeds · proceeds of crime
Written by attorneys · grounded in primary & secondary sources — see below
The value received upon the sale, exchange, collection, or other disposition of property or collateral. The term encompasses money, claims, or other assets acquired in place of the original property.
Pierre Poulin contracts to sell his home to Penelope Price. Before closing a fire destroys the house. Under the majority rule the risk has passed to Penelope. The insurer pays Pierre the policy proceeds. Pierre holds those proceeds in trust for Penelope and may not keep them to reduce the purchase price.
Paragon Construction borrows from Prosperity Investments to buy a vacant lot from Pinnacle Holdings. The loan documents require the funds to pay the purchase price at closing. The mortgage qualifies as a purchase money mortgage to the full extent the loan proceeds are used to acquire title.
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Portia Price's will specifically devises her vacation cabin to her niece Pearl Porter. Before death Portia sells the cabin and the buyer still owes part of the price. At death Pearl is entitled to the unpaid sale proceeds rather than the cabin itself.
Pablo Perez and Peter Park own a rural parcel as tenants in common. Physical division is impossible because of zoning rules that would render separate parcels unbuildable. The court orders a judicial sale and divides the sale proceeds between the co-tenants according to their ownership shares.
Precision Tools contracts to sell custom machinery to a buyer who later repudiates. The seller sues for the price while the goods remain in its possession. Before judgment the seller resells the machinery. The net proceeds of that resale are credited against the price the buyer owes.
A member brings a derivative action on behalf of Pinnacle Holdings LLC and obtains a settlement. The settlement funds are paid into court. Those proceeds belong to the LLC itself and the member must immediately remit them to the company rather than retain them personally.
Yes. Under UCC Article 9 a security interest in collateral automatically attaches to identifiable proceeds of that collateral even if the security agreement is silent.
In the majority of jurisdictions the risk passes to the buyer at contract formation. The buyer therefore cannot avoid the contract or reduce the price when improvements are destroyed and the seller holds any insurance proceeds in trust for the buyer.
The specific devisee is entitled to any unpaid proceeds from a sale, condemnation award, or insurance recovery that remain at the testator's death, unless the will shows a contrary intent.
When physical division is impractical a court may order sale and divide the proceeds among the co-tenants according to their ownership interests.
Any proceeds or benefits from a derivative action belong to the LLC and not to the plaintiff member, who must remit them immediately to the company.
…is free to accept or reject a plan devised by the Commission and approved by the other city agencies. If he accepts the plan, he proceeds to operate the property pursuant to the plan. If he rejects the plan, the Commission may recommend that the city proceed by eminent domain to acquire a protective interest in the landmark,…