A buyer in Lafayette makes an offer to purchase a home for $285,000 and deposits $5,000 in earnest money with the listing broker. The seller accepts the offer in writing. Before the Act of Sale is executed, the seller changes his mind and refuses to proceed. Under Louisiana law, what remedy is available to the buyer?
Correct Answer
A) The buyer may sue for specific performance or damages under Louisiana Civil Code obligations
Under Louisiana Civil Code Arts. 1986 and 1994, when a party fails to perform a valid contractual obligation, the aggrieved party may demand specific performance (compelling the seller to complete the sale) or may claim damages for breach. A signed purchase agreement creates binding obligations under Louisiana law, and a seller who refuses to proceed without legal justification is in breach. The buyer is not limited to recovering only the earnest money.
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Related Topics & Key Terms
Key Terms:
Related Concepts
An appraisal contingency allows the buyer to cancel or renegotiate the contract if the property's appraised value comes in lower than the agreed-upon purchase price. This contingency protects buyers from overpaying.
An assignment of contract transfers one party's rights and obligations under a contract to a third party called the assignee. The original party, known as the assignor, transfers their contractual position to someone who was not originally part of the agreement.
A bilateral contract is an agreement in which both parties exchange promises and are both obligated to perform, while a unilateral contract is one in which only one party makes a promise and the other party is not obligated to act.
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