In breach of a real estate contract, the law provides several ways through which the aggrieved party can seek retribution. These avenues include money damages, specific performance, and recession. It is also essential to note that the aggrieved party can also use the liquidated damages. However, in all the scenarios mentioned above, it is the duty of the aggrieved party to prove that the defendant breached the contract by failing to perform their obligations as indicated in the contract.
Money Damages
Scholars state that this remedy is based on the assumption that, in regard to money, the plaintiff has to be placed in the same position they would have been in if the contract was fully performed (Hinkel, 2011). An accurate approximation of money damages is done by estimating the difference between the price of the contract and the market value of the real estate under discussion. This, therefore, means that the injured party can lose or make money based on the fair market value established by the appraisers.
Specific Performance
Specific performance, as a remedy, is founded on a theory which argues that real estate has unique characteristics, which need the two parties involved to be mandated to perform their obligations as stated in the contract. In such an instance, the court orders the defendant to perform the contract as per the terms stipulated. The remedy is ideal for ensuring that the seller sells the property to the buyer as stated in the contract regardless of changes in the market. It is also ideal for cases where the contract for sale of property is clear and not fraudulent (Hinkel, 2011). Scholars, however, warn that this remedy cannot be applied in a situation where the seller cannot be defaulted to perform. For example, when a third party seller does not have a title but is required to perform.
Rescission
The legal objective for this remedy is to place the aggrieved party in the same position they would have been in had they not entered the contract. Hence, the plaintiff is compensated for losses incurred during the contract preparation and termination. A possible scenario where this remedy can be applied is when one of the parties used fraudulent methods in the formulation of the contract; for example, where the real estate being sold never belonged to the seller. It is necessary to note that rescission can be waived in situations where the purchaser’s conduct is debatable (Hinkel, 2011). In such a scenario, the waiver cannot be revoked.
In conclusion, the three remedies, money damages, specific performance, and recession are all inconsistent remedies used in real estate. As noted, the injured party cannot rescind the contract and collect money damages at the same time. This means that only one of the remedies can be used as established by the parties involved or a court of law.
Resources
Hinkel, D. (2011). Essentials of Practical Real Estate Law. Connecticut: Cengage
