Explain the rights of John, Bob and Janice, if the vacation home completely burn

Question

Explain the rights of John, Bob and Janice, if the vacation home completely burns down in a wildfire before the close of the escrow for sale of the home to Bob.

Escrow refers to a bond that is kept in the custody of a third party and taking effect only when a specified condition has been fulfilled.

Since the home completely burns down in a wildfire before the close of the escrow for sale of the home to Bob following are the rights of John, Bob and Janice.

Rights of John: Since John is the sole owner of the property and the home insurance lies belongs to him, John has legal rights to claim the compensation.

Rights of Bob: As it is clearly mentioned, that the home has completely burned down in a wildfire before the close of escrow for sale, Bob does not have rights to claim anything against the property as the sale is not fully complete and there are conditions to be fulfilled.

Rights of Janice: Assuming that Janice is John’s sister (as it is not mentioned in the case), she has just got the power of attorney from John to sell his house to Bob in the particular window. Hence, she doesn’t possess legal rights to claim against the property. However, the condition is very subjective. If John is no more, the situation is in favor of Janice where she can claim against the insurance with the power of attorney as John is no more. On the other hand, if John is claiming, Janice doesn’t have rights on the same.

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Explanation / Answer

John sends Carol an e-mail message stating that if Carol will promise to pay him $500,000, John will sell his vacation home in Big Bear to Carol. John’s e-mail message also says that if Carol wants to buy his vacation home, she must e-mail his sister and let her know that she wants to buy the home by December 1, because John will be out of the country on an African safari with no e-mail access. John’s e-mail message provides his sister’s e-mail address to Carol, but is not courtesy copied to his sister. Before John leaves on safari, he signs a power of attorney authorizing his sister to sell his vacation home in his absence. On November 30, Carol replies to John’s e-mail stating that she wants to buy his vacation house. On December 6, John’s safari reaches a small town where John can telephone his sister. John asks his sister whether she has heard from Carol about buying the vacation home. His sister tells him that she has not heard from Carol. John instructs his sister to sell the vacation home to Bob. John explained to his sister that Bob was young, but had inherited a lot of money and previously said he wanted to buy the vacation home. John is anxious to sell the vacation home before the end of the year for income tax purposes. On December 18, on behalf of John, John’s sister enters into a written contract with Bob to sell the vacation home to Bob (assume that John’s sister has the authority to enter into a legally binding contract on John’s behalf). Explain the rights of John, Bob and Janice, if the vacation home completely burns down in a wildfire before the close of the escrow for sale of the home to Bob.

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