An Ohio seller breaches a purchase agreement, and the buyer pursues actual damages. The buyer had contracted to purchase the property for $290,000. The buyer finds a similar property for $305,000. The buyer also paid $1,800 for an appraisal, $2,200 for inspections, and $3,000 in attorney fees related to the failed transaction. Under Ohio law, what is the buyer's maximum compensatory damage claim?
Correct Answer
C) $22,000 — the price difference plus all out-of-pocket expenses
The buyer's compensatory damages include: (1) benefit of the bargain loss ($305,000 - $290,000 = $15,000) plus (2) out-of-pocket expenses ($1,800 + $2,200 + $3,000 = $7,000) = $22,000 total. Ohio follows the benefit-of-the-bargain rule for breach of real estate contracts.
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Related Topics & Key Terms
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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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