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You are here: Experts > Real Estate > Apartment Living/Rental > Real Estate Law (esp. Landlord-Tenant) > Earnest Money
Expert: Jonathan Dever, Esq - 8/21/2008
Question
Hi,
Contract law questions:
I am guessing in any state the answer should be the same?
presale done 2 years ago, $40,000 + was given (10%) to escrow for earnest money.
"time is of the essence" is in the purchase and sale
Original date to close 1/08, 2 signed extensions signed around for 7/30. Buyer can no longer get financing, but could get $ from parents. It still seems like a financial burden to close on the loan, since the project keeps getting delayed and infrastructure is delayed as well. Home will not be ready by 7/30, and seller sends an extension for August. Buyer refuses to sign extension and 7/30 comes and goes and home is not finished. Should they not be entitled to receive all of the earnest money back since the contract expired and the seller could not deliver a finished home? regardless of any reason why the buyer changed their mind. I am getting answers that yes, the seller has breached the contract. Should be clear cut right?
Thanks
Answer
No, not clear cut. A simple breach is not a material one. Contract law is specific and fact intensive, but rarely can you void a contract and not pay for services rendered. Call a local attorney and explain the matter in great detail. If they understand contract law, they will be able to tell you what the net result for the breach is. In this case the expectation remedy is the appropriate remedy under law. You are asking for restitution, which is not possible.
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