Remedies Available to Buyer for Breach of Contract by Seller
Several remedies are available to buyer for breach of contract by seller. A buyer could sue the seller to abide by the specific terms of the contract.3 min read
Updated July 2, 2020:
Several remedies are available to buyer for breach of contract by seller. For example, the buyer could pursue monetary damages or could sue to force the seller to abide by the specific terms of the contract.
Buyer's Remedies for Breach of Contract
When a seller commits a breach of contract, the buyer who was harmed by the breach has access to a variety of remedies.
One of the most common remedies chosen by buyers after a breach of contract by the seller is a lawsuit for damages for nondelivery. These suits occur if the seller fails or simply refuses to deliver the goods that were promised in the contract. In addition to suing for damages, the buyer can request that the money they've already paid be returned. A suit for price is another remedy available for a contract breach. These suits involve the money that the buyer has paid for goods that were not delivered by the seller.
In some contracts between buyers and sellers, the goods described are specific, meaning if these goods are not delivered, monetary damages would not be enough to make up for the loss. In these circumstances, the buyer can file a suit for specific performance. If the buyer wins the suit, the seller will be forced to abide by the terms of the contract, meaning they would need to deliver the specific goods that were promised.
Several other damages are available to buyers who have been harmed by a breach of contract:
- Suit for Breach of Warranty: If the seller breaches a warranty, or the buyer is forced to consider a conditional breach as a breach of warranty, the goods cannot be rejected by the buyer. The buyer can, however, sue for damages resulting from the breach of warranty.
- Suits for Damages of Repudiation: If a contract is repudiated by the seller for the dates the goods were due to be delivered, the buyer can either sue for damages for an anticipatory breach or can consider the contract as active and wait until the delivery date to take action.
- Suit for Interest: In some cases, a buyer can file a suit for interest, which means they could receive special damages in the form of interest on the original price paid.
Buyer's Remedies for Breached Real Estate Contracts
In most cases, when a person is selling a home, they will want to close a sale as quickly as possible, meaning they'll do everything in their power to avoid messing up a deal. Unfortunately, on some occasions, a home seller will back out of a deal, usually because they've decided they don't actually want to sell or a better offer has been made by another buyer.
Luckily, if a home seller reneges on an agreement to sell their home, the harmed buyer has several remedies at their disposal, including:
- Seeking monetary compensation for breach of contract.
- Terminating the contract and requesting that their deposit be returned and that reasonable expenses be covered.
- Pursuing specific performance, meaning the home seller would be forced to complete the sale.
Before a homebuyer pursues any of these remedies, they should keep in mind that most real estate contracts include contingencies, which is a legal method for both the buyer and the seller to exit the contract without repercussions.
For instance, in some real estate contracts, there is a contingency that states that a house can only be sold once the seller finds another home to purchase. If the seller makes a good-faith effort to find a new home but is unable to find a suitable property, they will have the right to terminate the contract without being punished. If this occurs, no legal remedies would be available to the buyer because the contract hasn't actually been broken.
After a real estate contract has been breached, suing for monetary damages is a common remedy. To receive these damages, the buyer would need to provide evidence that they suffered financial harm from the breach of contract. The amount of monetary damages a buyer can receive largely depends on the applicable state laws. For instance, if the seller was acting in good faith, the buyer may only be able to receive damages in the form of their deposit and a few additional expenses.
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