A Connecticut seller and buyer signed a residential purchase agreement. The contract did not contain a liquidated damages clause. The buyer defaulted by failing to close without a valid contingency excuse. The seller, frustrated, immediately re-listed the property and sold it three months later for $18,000 less than the original contract price. The seller now sues the defaulting buyer for damages. Under Connecticut law, which of the following most accurately describes the seller's recoverable damages?
Correct Answer
A) The seller may recover the $18,000 difference in sale price plus carrying costs incurred during the three-month re-listing period, subject to the seller's duty to mitigate damages
In Connecticut, when a buyer breaches a real estate contract that does not contain a liquidated damages clause, the seller is entitled to actual damages — typically the difference between the contract price and the resale price, plus additional provable consequential damages such as carrying costs (mortgage payments, taxes, insurance, utilities) incurred during the period of re-listing and resale. However, the seller has a duty to mitigate damages by making reasonable efforts to re-sell the property promptly. The $18,000 price difference and documented carrying costs during the three-month period are the paradigmatic measure of actual damages in this scenario.
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Related Topics & Key Terms
Key Terms:
Related Concepts
Equitable title is the buyer's interest in a property after a purchase contract is signed but before closing, giving the buyer the right to acquire legal title in the future. The seller retains legal title until the deed is delivered at closing.
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.
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