A buyer and seller entered into a residential purchase contract in Connecticut. The seller breached the contract by failing to close on the agreed date. The buyer chose not to pursue specific performance and instead elected to rescind the contract. In addition to recovering the earnest money deposit, the buyer also seeks to recover the cost of the home inspection, attorney's fees for reviewing the contract, and moving costs already incurred. Under Connecticut law, which of the following best describes the buyer's ability to recover these additional costs?
Correct Answer
A) The buyer may recover all additional costs as consequential damages flowing from the seller's breach, provided they are proven with reasonable certainty
Under Connecticut contract law, a non-breaching buyer who rescinds due to the seller's breach may recover consequential damages — costs incurred in reasonable reliance on the contract — in addition to the return of the earnest money deposit. Inspection fees, attorney's fees for contract review, and moving costs that were reasonably foreseeable and incurred in direct reliance on the contract can be recoverable as consequential or reliance damages, provided the buyer proves them with reasonable certainty. Connecticut courts do not categorically exclude these items from recovery.
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Related Topics & Key Terms
Key Terms:
Related Concepts
A financing contingency makes the purchase contract conditional upon the buyer obtaining mortgage approval within a specified time period. If the buyer cannot secure financing, they can cancel the contract and receive their earnest money back.
An inspection contingency gives the buyer the right to have the property professionally inspected within a specified time frame and to negotiate repairs or cancel the contract based on the findings.
Liquidated damages are a predetermined amount of money specified in the contract that the non-breaching party is entitled to receive if the other party breaches. In real estate, the earnest money deposit typically serves as liquidated damages.
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