New York Real Estate Salesperson ExaminationContractsMedium
A buyer and seller sign a real estate purchase agreement. Before the closing date, the seller decides they no longer want to sell the property and refuses to complete the transaction. The buyer, who is eager to purchase this specific property, wishes to compel the seller to go through with the sale. What legal remedy would the buyer most likely pursue?
- AMonetary damages for breach of contract.
- BLiquidated damages.
- CRescission of the contract.
- DSpecific performance.
Show answer & explanationAnswer & explanation
Correct answer: D. Specific performance.
Specific performance is a legal remedy in which a court orders a party to perform a specific act, such as completing the terms of a contract. In real estate, because every property is considered unique, specific performance is often available to a buyer to compel a reluctant seller to close the sale.
Why the other options are wrong
- A. While monetary damages are an option, they may not adequately compensate a buyer who desires a unique property, making specific performance a more desirable remedy in real estate.
- B. Liquidated damages would be a predetermined sum of money for breach, but the buyer wants the property, not just money.
- C. Rescission would involve canceling the contract and returning both parties to their original positions, which is not what the buyer wants if they wish to compel the sale.
Specific Performance
A court order compelling a party to perform a specific act, usually to fulfill the terms of a contract, rather than paying damages.
- Often used in real estate contracts (unique property).
- Granted when monetary damages are inadequate.
- Forces breaching party to complete the original agreement.
- Not typically used for personal services contracts.
Memory trick: Perform, Rescind, Damages: How a buyer fights for their deal.