Merger: After merger, which statement is true about contract obligations and the deed?

• A. Merger generally merges but not collateral obligations
• B. All contract obligations survive after deed
• C. Merger does not apply to any obligation
• D. The deed controls only after closing

Answer: (A)

When a real estate transaction closes, the contract’s promises that relate to the transfer of property are merged into the deed; the deed becomes the instrument that governs the rights and duties moving forward, and the contract terms that concern title or what is conveyed are effectively replaced by the deed’s covenants. But there’s an important caveat: not all promises vanish. Collateral or independent covenants—those not incorporated into the deed or not intended to be part of the deed’s conveyance—remain enforceable as separate contract obligations. So, the general rule is that the contract obligations merge into the deed, but collateral obligations do not merge and can survive. For example, a separate agreement to pay a broker’s commission or to handle issues outside the deed’s covenants would continue as a contract obligation after closing. The other options misstate the balance between merger and survival or describe effects that aren’t accurate for how the deed interacts with contract promises.