1 Remedies for Breach of Real Estate Sales Contract Real Estate Law Mike Brigner

2 Types of Actions Legal Remedies - Monetary Damages –Benefit of the bargain –Liquidated damages –Punitive damages Equitable Remedies - Ordered for Fairness –Rescission –Specific performance –Injunctions

3 Types of Actions Breach of Warranty Breach of Implied Warranty Fraudulent Representations Fraudulent Non-disclosure Brokers Suit for Commissions Actions Against Broker

4 Benefit of the Bargain Amount the party would have gained if deal had gone through Liquidated Damages Amount agreed upon in the contract

5 Punitive damages To punish bad conduct by breaching party Rescission Asks court to rescind the contract & dont force the non- breaching party to go through with it

6 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 wont fix it)

7 Injunction Special court order requiring or forbidding specific conduct

8 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

9 Fraudulent Representation Product is not as it was represented to be (Good roof is actually leaky) Fraudulent Non- Disclosure Something which law says should be disclosed was not (Annual flooding, not apparent)

10 Brokers Suit for Commission Most often failure to pay commission because sale never done due to fault of buyer or seller Actions Against Broker Caused deal to fall through Didnt produce buyer Failed to make statutory disclosure of defects

11 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, debtors 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)

12 Remedies for Breach of Real Estate Sales Contract Concluded Thank you