In Ontario, what remedy does a seller usually have when a buyer defaults on an Agreement of Purchase and Sale?
Correct Answer
D) The seller keeps the deposit and can claim further damages
When a buyer defaults, the seller is generally entitled to keep the deposit and may also sue for any further loss, such as a lower resale price and carrying costs, with the deposit credited against the damages. The deposit is not a cap on the seller's recovery, and it is not a fixed percentage of the price. Because the deposit is held in trust, it is released to the seller by written agreement of the parties or a court order.
Why This Is the Correct Answer
This is correct because it states both parts of the usual remedy: the seller keeps the deposit, and the seller can also claim any further damages caused by the buyer's failure to close. The deposit is credited toward, not a limit on, what the seller recovers.
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