Contracts
What is 'material breach' in a Pennsylvania real estate contract and what are the non-breaching party's remedies?
AAny minor violation of the contract's terms, even if easily corrected
BA significant failure to perform a material contractual obligation that defeats the purpose of the contract; the non-breaching party may treat the contract as terminated and sue for damages✓ Correct
CA breach requiring the parties to submit to PREC mediation before proceeding
DA breach that automatically voids the contract without any court involvement
Explanation
A material breach is a significant, fundamental failure to perform that goes to the heart of the contract — such as a seller refusing to close, a buyer failing to appear at settlement, or a party failing to meet a time-is-of-the-essence deadline. In Pennsylvania, the non-breaching party may: (1) treat the contract as terminated and recover consequential damages; (2) seek specific performance; or (3) retain the earnest money (if the seller is the non-breaching party).
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