Bar Exam — MBE (Multistate Bar Exam)Real PropertyMedium
A buyer entered into a written contract to purchase a residential property from a seller for $300,000. The contract specified a closing date of June 1st. On May 15th, the seller informed the buyer that he had decided not to sell the property. The buyer immediately sued for specific performance. The seller argued that specific performance should not be granted because the buyer had not yet tendered payment. Which of the following is the most likely outcome?
- ASpecific performance will be denied because the buyer has an adequate remedy at law (damages).
- BSpecific performance will be granted, but only if the buyer can prove they had the funds available on May 15th.
- CSpecific performance will be denied because the buyer failed to tender payment by the closing date.
- DSpecific performance will be granted because the seller's repudiation excused the buyer's tender requirement.
Show answer & explanationAnswer & explanation
Correct answer: D. Specific performance will be granted because the seller's repudiation excused the buyer's tender requirement.
When a party anticipatorily repudiates a contract, the non-breaching party is generally excused from performing their own conditions precedent, such as tendering payment. Specific performance is a common remedy for real estate contracts due to the unique nature of land.
Why the other options are wrong
- A. Real estate is considered unique, so monetary damages are generally not an 'adequate remedy' for a breach of a real estate contract, making specific performance a standard remedy.
- B. While ability to perform is relevant, the immediate concern is whether tender was required after repudiation. The seller's clear statement made tender unnecessary.
- C. The seller's repudiation occurred before the closing date, excusing the buyer from the futile act of tendering payment.
Anticipatory Repudiation (Real Estate Contracts)
A clear and unequivocal statement by one party to a real estate contract that they will not perform their contractual obligations before the performance is due.
- Allows the non-breaching party to sue immediately.
- Excuses the non-breaching party from performing conditions precedent.
- Commonly leads to specific performance as a remedy for buyer if seller repudiates.
- Must be a definite statement of intent not to perform.
Memory trick: Repudiation Rips Relations, Remedies Respond Rapidly.