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The seller's death does not discharge the contract — the executor may complete

A worked RES examination question on terms breach and discharge, from our Paper 1 bank — with the rule it turns on, and why each of the four options is right or wrong.

Paper 1Lesson 6Terms breach and dischargeFree — no sign-up

The question

A seller dies after the buyer has exercised the option but before completion. The buyer is willing to wait for the estate to be administered. In an unrelated transaction the same month, a buyer dies after exercising, and his family wish to know where they stand.

Which statement is correct?

  1. A. Both contracts are discharged, the death of a party to a land contract ending it.
  2. B. Neither is discharged; in each case the deceased's estate must complete on the terms.
  3. C. The seller's death does not discharge the contract; nor does the buyer's death either.
  4. D. The seller's death discharges it; the buyer's does not, his estate being liable to complete.

The answer, and why

Answer: C

The rule. The seller's death does not discharge the contract — the executor may complete. The buyer's death does discharge it, performance having become impossible, and the estate recovers what was paid.

Why C is correct. It states both halves in the right direction.

The other options.

  • A discharges both.
  • B discharges neither.
  • D inverts the pair, which is where a candidate who knows the rule is asymmetric but not which way round will land.

Exam note. Ask who died. Seller-side, the contract survives; buyer-side, it does not.

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