What is Marketable title?

Marketable title is a title that a court of equity considers to be so free from defect that it will legally force its acceptance by a buyer. Marketable title does not assume that absolute absence of defect, but rather a title that a prudent, educated buyer in the reasonable course of business would accept. For real estate practitioners, the most complete reference to title issues is found in the preprinted wording contained within an agreement/contract. If you cannot produce a clear title of deed to the property then the prospective buyer should expect to lose in a specific performance action.

Merchantable title and marketable title are synonymous terms.

In the absence of an agreement to the contrary, there is an implied undertaking in the contract that the vendor has a marketable title. The contract typically provides that on failure of a vendor to deliver good and marketable title, the vendee may rescind the contract and recover any deposit.