Bethurem (P) contracted to buy a residence from Hammett (D). P made a cash down payment and agreed to monthly installments for the balance. The transaction was completed in 1983. In 1985, a dispute arose from the encroachment of the residence, the garage and a fence into a dedicated city street. P then sued D to rescind the contract. At trial, P relied upon the contract provisions that called for delivery of a statutory warranty deed and that D was to provide an abstract or Title of Commitment for Title Insurance that shows good merchantable title. P claimed that the breach of the sales agreement covenants was a misrepresentation entitling them to rescission and that the encroachment onto the public street was a defect which rendered the title unmarketable. The trial court ruled for D and P appealed.

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