BREACH OF REAL ESTATE SALE CONTRACT
Breach of Real Estate Sale Contract
When one party to a real estate transaction refuses to close and asks to cancel the transaction,
oftentimes people file like there is nothing that can be done about it. Many times, people will reluctantly
sign a Cancellation and Mutual Release (CAMR), which cancels the transaction without either party
owing any money to the other party.
However, in most real estate transactions, there are remedies available when one party refuses to close.
For example, if a buyer refuses to close a transaction but there is no valid option in the contract to allow
the buyer to refuse to close, the buyer’s refusal to close constitutes a breach of contract.
The standard form residential offer to purchase states as follows:
Seller and Buyer each have the legal duty to use good faith and due
diligence in completing the terms and conditions of this Offer. A
material failure to perform any obligation under this Offer is a default
that may subject the defaulting party to liability for damages or other
legal remedies. If Buyer defaults, Seller may: (1) sue for specific
performance and request the earnest money as partial payment of the
purchase price; or (2) terminate the Offer and have the option to: (a)
request the earnest money as liquidated damages; or (b) sue for actual
damages. If Seller defaults, Buyer may: (1) sue for specific performance;
or (2) terminate the Offer and request the return of the earnest money,
sue for actual damages, or both.
Every situation is unique and is determined by the specific contract and facts involved. Contact Zimmer
& Rens LLC today if you are experiencing this type of situation.