Also known as: Uniform Vendor and Purchaser Risk Act · UVPRA
Written by attorneys · grounded in primary & secondary sources — see below
A uniform statute that allocates the risk of loss from physical destruction or eminent domain in executory land sale contracts to the seller until possession or title passes to the buyer. The Act displaces the equitable conversion rule that would otherwise place risk on the buyer at contract formation. If the property is destroyed before the buyer takes possession or receives title, the buyer may rescind and recover any payments made.
Ulysses Usher signed a contract to buy an apartment complex from Uptown Apparel. Forty-five days later a fire destroyed one building while Uptown Apparel still held possession and title. Because the Uniform Vendor and Purchaser Risk Act applied, the risk remained with Uptown Apparel. Ulysses Usher rescinded the contract and recovered his deposit.
Uliana Ustinova contracted to purchase a beachfront resort from Ultrasonic Dynamics. A hurricane later destroyed the pool and eroded the beach while Ultrasonic Dynamics retained both possession and title. Under the Act the seller bore the risk. Uliana Ustinova obtained rescission and return of her deposit.
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The Act keeps risk of loss with the seller until the buyer receives possession or title. Equitable conversion places risk on the buyer at contract formation in many jurisdictions. The Act therefore allows the buyer to rescind after destruction rather than requiring payment of the full price.
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Risk passes only when the buyer takes possession or receives title. Until one of those events occurs the seller bears any loss from physical destruction or eminent domain.
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The buyer may treat the contract as unenforceable and recover any payments already made. The seller cannot force the buyer to close and pay the full price for damaged property.
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