526,427 views
19 votes
19 votes
A seller put her house and lot on the market for $200,000. After receiving several offers within $5,000 of her asking price, the seller entered into a contract to sell the house and lot to a buyer for $200,000. The contract provided that the buyer put up $4,000 in earnest money, which the seller could treat as liquidated damages unless: The seller fails to tender marketable title to the buyer by the agreed-upon closing date, the seller commits a material breach of this contract, or the buyer dies prior to the closing date, in which case the earnest money shall be reimbursed to the buyer's estate. The contract was signed on July 24, and the closing date was set for September 12. On August 5, the buyer was seriously injured in an accident. On September 10, the buyer was released from the hospital in a wheelchair. He determined that a ranch-style house would make his life much more bearable, but the seller's home was two stories. The buyer asked the seller to cancel the contract and to refund the $4,000 earnest money. The seller refused. The buyer did not appear on the closing date. On September 16, the seller contracted to sell the home to a purchaser for $198,000. The closing occurred as planned on October 20. The buyer files suit against the seller, praying for a refund of the $4,000 earnest money. How much is the buyer likely to recover

User Ian Hopkinson
by
3.1k points

1 Answer

7 votes
7 votes

Answer:

$0

Step-by-step explanation:

Both the buyer and seller agreed upon the amount that would be deposited as earnest money and what would happen to it in case the sale wasn't closed. The amount is not unreasonably large compared to the purchase price (2% only) and that represents a fair amount for the damages suffered by the seller. The seller is not responsible for the things that happened to the buyer.

User SanjX
by
3.1k points