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Contracts • Remedies for Unexcused Non-Performance
K#167
Legal Definition
(Contract Price) - (Fair Market Value)
Plain English Explanation
In the breach of a sale of land contract, the damages are calculated using a straightforward formula: You take the price agreed upon in the contract and subtract the fair market value of the land at the time of the breach.
If the fair market value is higher than the contract price, the buyer's breach results in damages for the seller, as the seller misses out on selling the land at a higher
If the fair market value is higher than the contract price, the buyer's breach results in damages for the seller, as the seller misses out on selling the land at a higher
Hypothetical
Hypo 1: Bob wants to sell his land to Sam. They agree on the price of $50,000. Sam ends up deciding he doesn't want to buy the land. Bob finds another buyer who offers him $45,000. Bob accepts. Result: Bob can sue Sam for $5,000, which is the difference between the contract price of $50,000, and the fair market price of $45,000 that it was purchased for.
Visual Aids
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