Contracts
Under New York law, 'damages for breach of contract' in a real estate purchase agreement may include which of the following for an aggrieved buyer?
AOnly the return of the earnest money deposit
BReturn of the deposit, plus additional out-of-pocket losses (such as inspection costs, legal fees, moving costs) and potentially benefit-of-the-bargain damages (the difference between the contract price and the higher market value at the time of breach)✓ Correct
CPunitive damages triple the amount of the deposit
DOnly the value of any improvements the buyer made to the property
Explanation
When a seller breaches a New York real estate contract, the buyer may recover: (1) return of the earnest money deposit; (2) out-of-pocket (reliance) damages (inspection, legal, financing fees); and (3) benefit-of-the-bargain damages (where the contract price was below market value at the time of breach, the buyer may recover the difference). Alternatively, the buyer may seek specific performance.
Related New York Contracts Questions
- A 'time is of the essence' clause in a New York real estate contract means:
- Which of the following is an example of 'mutual assent' (meeting of the minds)?
- In New York, real estate purchase contracts must be in writing to be enforceable under:
- Which type of listing gives the broker the LEAST protection?
- A buyer makes an offer, and the seller responds by changing one term of the offer. The buyer then accepts the seller's changed term. Which of the following best describes the binding contract?
- When a New York seller accepts a backup offer while already under contract with a primary buyer, this is:
- In New York real estate practice, the contract of sale is typically prepared by:
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