If a purchaser withdraws from a contract but then decides to buy can seller be compensated?
Full Question:
Answer:
A breach of contract is a failure to perform the contract in the manner called
for by the contract. A breach does not always result in a lawsuit or mean
the end of a contract. One party may be willing to waive or ignore the
breach. A party who waives a breach gives up the right to damages or
remedies regarding such breach, and cannot use the breach as a reason for
not performing the contract.
An appropriate remedy for a breach may be rescission of the contract. This
places the parties in the position they would have been had the contract
never been entered into. If the seller rescinded the contract, then he may
enter into a new contract with the purchaser and charge a higher price.
In any new contract, the seller may want to add language similar to the
following:
DEPOSIT: Buyers have deposited with Seller the sum of $_________cash
as earnest money. The same is to be applied to the cash down payment on
closing of this transaction. Should Buyers require approval for a specified
loan for any part of the purchase price, and after applying therefore in good
faith, be unable to secure such loan, then the earnest money shall be
returned in full to Buyers. However, should Buyers fail or refuse within five
days of this contract to apply for such loan or refuse to diligently pursue loan
approval, or fail or refuse within fifteen days after the issuance of a loan
commitment, to execute all documents necessary for said loan, Buyers shall
be considered in default under the terms of this contract and Sellers shall
have such recourse as is delineated in paragraph ______ of this contract.