Helena agreed to sell her home to Theo for $300,000 with a closing date of June 1. Two weeks before closing, a buyer offered Helena $325,000 for the same property and she informed Theo by email that she was withdrawing from their contract. Theo had already paid $1,500 for a home inspection and $800 for an appraisal, and similar homes in the neighborhood now list for roughly $15,000 more than Helena's contract price. Theo files suit asking the court to make him whole for the financial position he would have occupied had Helena performed. Which form of monetary award is Theo most likely to receive?
Correct Answer
B) Compensatory damages
Helena's repudiation caused Theo measurable, out-of-pocket losses (the $1,500 inspection plus the $800 appraisal) plus a quantifiable market difference of approximately $15,000. A court awarding monetary relief to restore Theo to the position he would have occupied had Helena performed grants compensatory damages.
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Related Topics & Key Terms
Key Terms:
Related Concepts
A time is of the essence clause in a contract means that all deadlines and dates specified in the agreement are strictly enforceable, and failure to meet them constitutes a material breach.
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.
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