Ally had just signed the sales agreement to buy Emile's house. However, before closing the sale, the house caught fire. According to the rule of equitable conversion, the loss due to fire would be shared in an equitable manner by both Alley and Emile.

Question

Quizplus · Accepted Answer

Under the rule of equitable conversion, the risk of loss typically passes to the buyer once the sales agreement is signed, meaning Ally would bear the loss unless the contract states otherwise or local laws provide different protections.

Ally Had Just Signed the Sales Agreement to Buy Emile's