## Facts

- Buyers (Paul and Gila Mallin) contracted in writing to purchase a single-family home from seller (Arline Good) in Lake County, Illinois.
- The contract required the seller to deliver the heating, plumbing, electrical, and air-conditioning systems in reasonable working order at closing.
- The contract also required a roof inspection by a specified date and completion of any needed roof repairs at the seller’s expense.
- Before closing, inspections revealed multiple defects, including a poor roof condition, a nonworking faucet and clothes dryer, evidence of water leakage, and septic system problems.
- Title was conveyed through a nominee: the seller deeded to a nominee designated for the purchasers, who then conveyed to the purchasers.
- At closing, the buyers proceeded with the transaction while stating they viewed the seller as in breach and intended to enforce the repair obligations after closing.
- No repair escrow was created, and the deed contained no repair provisions; an escrow was set up only for title-related matters.
- The buyers paid the purchase price, accepted the deed, and sued to enforce the repair covenants and recover damages.

## Issues

1. Whether contractual covenants to repair the roof and deliver specified systems in reasonable working order merged into the deed upon closing, barring suit when the deed was silent.
2. Whether conveying title to a purchaser’s nominee eliminated privity so the purchasers could not enforce the seller’s contractual covenants.

## Decision

- The appellate court reversed summary judgment for the seller and remanded.
- The court held the repair and “reasonable working order” covenants were collateral to the conveyance and did not merge into the deed.
- The court held the nominee conveyance did not destroy privity between the contracting parties, and the purchasers could enforce the contract.
- Because the trial court’s merger and privity rulings were legally erroneous, summary judgment for the seller was improper.

## Legal Principles

- Delivery and acceptance of a deed generally merges prior contract terms into the deed as the final expression of the parties’ agreement.
- Merger does not extinguish collateral or independent contractual undertakings that are not necessarily satisfied by delivery of the deed, especially where they remain unperformed at closing.
- Contractual promises concerning repairs and the condition or operation of property systems may be collateral to the transfer of title and may survive closing when the deed is silent.
- A purchaser’s use of a nominee to take title is a conveyancing device that does not, by itself, terminate contractual privity or relieve the seller of contractual obligations to the purchaser.

## Conclusion

The court held that the seller’s unperformed repair-related covenants in the sales contract survived the deed under the collateral-covenant exception to merger, and that routing title through a purchaser’s nominee did not defeat privity; the seller therefore was not entitled to summary judgment.


Mallin v. Good, 417 N.E.2d 858 (Ill. App. Ct. 1981)