I would agree with you to the extent that an abstractor has missed an item on his abstract. That is why he/she should be carrying e&o insurance. In a situation such as this you should be asserting a claim against him/her. The insurance is there for your protection as much as his/hers. If you are using uninsured abstractors that is a problem you need to address.
Your reasoning with respect to late performance is a little more involved. There are a number of reasons why a search may be late...fragmented chains of title...discrepancies in legal descriptions...bankruptcies, etc. A good abstractor notifies his client of the difficulties within the time frame in the agreement, and the client is given the choice of extending the time for completion or finding another abstractor. If anything the problem is created by the TC's failure to allow sufficient time for complications that may arise during the search. I have received search orders requesting a six hour turn around because the parties want to close within the next twenty four hours. Our firm normally informs the client to look elsewhere for an abstractor. I can remember a time when the title search was one of the items performed early in the closing process rather than left to the last minute.
To follow your reasoning to the logical conclusion...If the TC finds that late delivery of the search is not acceptable, and refuses to pay for it the TC should also return the abstractor's work (his/her property) to him/her. In the event that the TC has used the late abstract for purposes of the closing...the TC has waived its right to timely performance, or in the alternative has accepted the benefits of the contract, and is equitably estopped from denying the validity of the contract. While refusal to make payment may be appropriate when the abstractor's work is rejected, and returned to him/her, late payment is not acceptable if the TC uses the late abstract. It is a very simple matter for the abstractor to subpoena the records of the title insurance company to determine if his/her abstract was the basis upon which a title insurance commitment/policy was issued. Repeated failure of the title company to provide a reasonable explanation for non payment/slow payment makes it more likely that there is none or that the reason is only pretextual. It also makes it easier for the abstractor to collect his/her fee in litigation.
With respect to your claim of abstractors "trashing" title companies...I would invite you to present evidence in support of your assertion. I have been following the discussion on SOT for four years. So far I have seen abstractors posting claims of non payment/slow payment concerning title companies, making inquiries as to other abstractors' experiences with a particular title company or explaining that a particular title company's payment policies are not acceptable based upon their similar experiences with other title companies in the past. What you are seeing is the reaction of abstractors to years of having title companies pressure them for improved service coupled with a demand for reduction in their prices. Considering the expense of producing an accurate and timely abstract there is no room for further price reductions...nor late payment.
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