You can breach these by not having a freehold estate at the time you sold the real estate (you were only renting the property, for example), or by having a freehold estate that was illegal and didn’t give you the right to sell it to anyone. You can’t easily breach the first covenant accidentally, but it is possible to accidentally breach the second covenant. Damages will amount to the price the buyer paid for the property or whatever portion of it you failed to legally transfer to him. Some courts won’t even require to transfer the property back to you when you pay him the purchase price.

You can breach this one if there is a mortgage on the property, for example, at the time you sell him the property. It is, then, quite possible to breach this covenant accidentally because you breach it even if the mortgage was taken out by the guy who sold the property to you and even if you didn’t know about it. Damages will amount to either the amount of money needed to remove the encumbrance (pay of the mortgage, for example), or the amount by which the market value of the real estate has been diminished on account of the encumbrance. In no case, though, will damages exceed the value of the land. If your buyer ends up getting thrown off his property by someone who comes along with a superior claim to title to the real estate (you’d be surprised how easy it is for that to happen), you may have to pay the buyer back the amount he originally paid for the real estate (or a proportion of that if he’s only been thrown off part of the property)

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