How do I void an offer to purchase real estate since there are two liens against the property?

Full question:

I have recently signed an offer to purchase real estate and am now finding out that there are two separate liens on the property. How do I terminate this offer?

• Category: Contracts
• Subcategory: Recission
• Date: 04/07/2025
• State: Illinois

Answer:

The answer will depend on all the facts and documents involved, such as whether the seller made any guarantees about transferring clear title or the agreement was made to sell the property as is. If a seller doesn't make any warranties about the property having clear title, it is typically the buyer's responsibility to discover whether there are any claims on the property. A title company will often be hired to perform a title examination or title insurance may be provided. I suggest you consult a local attorney who can review the documents and circumstances involved.

Courts have held that a party may rescind a contract for fraud, incapacity, duress, undue influence, material breach in performance of a promise, or mistake, among other grounds. In order to prove a fraud claim, it must be shown that the defendant had an intent to deceive. If deception was used to induce another to rely on a promise and such reliance caused harm, it is possible to recover damages. Fraud may be made by an omission or purposeful failure to state material facts, which nondisclosure makes other statements misleading.

To prove a material breach of contract that relieves a party of the obligation to perform their end of the bargain, it must be shown that the breach was significant enough to cause the transaction that was bargained for to no longer have value. It will be a matter of subjective determination for the court based on all the facts and circumstances involved, to determine if there has been a material breach of the contract or fraud. If a breach or fraud is found, it is possible that the contract may be rescinded and/or damages may be recovered.