Contract of Sale Remedies

The conventional common law remedy for a breach of contract is an award of money damages based on the non-breaching party's expectation loss. So for example if a buyer breaches, the seller might recover the difference between the contract price and a later resale price, with any additional carrying costs of the property until the resale. 

The Anglo-American common law treats every parcel of real estate as unique; therefore, specific performance is always available as an alternative remedy for breach of a sale contract. Typically the buyer would seek specific performance to force a seller to close a sale, but in theory a seller may also seek specific performance. This special rule for real estate contracts is an exception to the general rule that specific performance is an exceptional breach of contract remedy.

The other contract remedy rule specific to real estate sales is the seller's right to keep a buyer's deposit if the buyer breaches. This right is an exception to general contract law principles that limit liquidated damages to those that reasonably approximate actual loss. A seller may retain the breaching buyer's deposit even if the seller has no economic loss, for example, if the seller is able to resell the property at a higher price. Because the buyer's deposit is at risk in the event the parties have a dispute about an alleged breach, the amount of the deposit is an important consideration in negotiating a real estate sale agreement.