Remedies for Breach of
Real Estate Sales Contract
Real Estate Law
Mike Brigner
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Types of Actions
• Legal Remedies - Monetary Damages
– Benefit of the bargain
– Liquidated damages
– Punitive damages
• Equitable Remedies - Ordered for Fairness
– Rescission
– Specific performance
– Injunctions
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Types of Actions
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Breach of Warranty
Breach of Implied Warranty
Fraudulent Representations
Fraudulent Non-disclosure
Broker’s Suit for Commissions
Actions Against Broker
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• Benefit of the Bargain
• Liquidated Damages
• Amount the party
• Amount agreed upon
would have gained if
in the contract
deal had gone through
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• Punitive damages
• Rescission
• To punish bad conduct • Asks court to rescind
by breaching party
the contract & don’t
force the nonbreaching party to go
through with it
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Specific Performance
• Asks court to require
the exact terms of the
contract to be carried
out:
• Deliver purchase
price, or
• Deliver the title
• 2 Requirements:
• Contract must be in
writing (or partial
performance done)
• No adequate remedy
at law ($ damages
won’t fix it)
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•
• Injunction
• Special court order
requiring or
forbidding specific
conduct
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• Breach of Warranty
• Used most often in
construction situation
• Product is defective,
not as it was promised
to be
• Breach of Implied
Warranty of Fitness
and Merchantability
• Product is not fit for
purpose for which it
was intended
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• Fraudulent
Representation
• Fraudulent NonDisclosure
• Product is not as it
was represented to be
• Something which law
says should be
disclosed was not
• (“Good roof” is
actually leaky)
• (Annual flooding, not
apparent)
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• Broker’s Suit for
Commission
• Actions Against
Broker
• Most often failure to
pay commission
because sale never
done due to fault of
buyer or seller
• Caused deal to fall
through
• Didn’t produce buyer
• Failed to make
statutory disclosure
of defects
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Other Real Estate Litigation
• Lis pendens – Law puts a hold on title to any real
estate involved in pending litigation
• Probate – Buyer must make sure all required
steps taken in probate estate
• Domestic Relations – Lis pendens applies
– Any sale during divorce is subject to decree
• Bankruptcy – Upon filing, debtor’s title passes to
Trustee. No sale w/o Court OK
– Sale just before filing bankruptcy can be voided by
court, if fraud (inadequate consideration) or
preference (favoring one creditor)
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Remedies for Breach of
Real Estate Sales Contract
Concluded
Thank you
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