Robert, a buyer in Brookline, Massachusetts, signs a purchase and sale agreement with a $20,000 deposit. The agreement does not contain a liquidated damages clause. Robert later defaults without legal justification. The seller re-lists the property and ultimately sells it for $25,000 less than the original contract price. Under Massachusetts law, what is the seller's most appropriate remedy?
Correct Answer
B) The seller may sue Robert for actual damages, which would include the $25,000 price difference and any carrying costs, but the deposit would be credited against the judgment.
When a Massachusetts purchase and sale agreement does not contain a liquidated damages clause, the seller's remedy for buyer default is actual damages. Actual damages include the difference between the contract price and the resale price ($25,000) plus additional carrying costs incurred while the property was re-listed. However, the deposit retained by the seller must be credited against any damages judgment — the seller cannot retain the deposit AND recover full actual damages without crediting the deposit amount.
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