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Remedies for Common Types of Violations

When a real estate contract is violated, California law provides several remedies to address the breach and protect the non-breaching party’s rights. The type of remedy available depends on the nature of the breach and the specific circumstances of the dispute. Below, we outline the key remedies for common violations of real estate contracts.

Rescission of the Contract

Rescission is a remedy that cancels the contract and restores both parties to their pre-contract positions. This remedy is typically available when there has been a significant breach, such as:

  • Fraud or misrepresentation about the property’s condition or material facts.
  • Failure to meet essential obligations under the agreement, such as transferring clear title.

How Rescission Works

  • The contract is declared null and void.
  • The buyer may be entitled to a refund of their purchase price and related costs.
  • The seller may regain possession of the property, depending on the situation.

Relevant Law

California Civil Code Section 1689 allows for the rescission of contracts in cases of fraud, mistake, or material breach.

Specific Performance

Specific performance is a remedy that requires the breaching party to fulfill their obligations under the contract. This remedy is often used in real estate disputes because real property is considered unique, and monetary damages may not adequately compensate the non-breaching party.

Examples of Specific Performance

  • A seller is ordered to complete the sale and transfer the property to the buyer as agreed in the contract.
  • A buyer is compelled to complete the purchase if they unjustly attempt to back out of the agreement.

Relevant Law

California Civil Code Section 3384 permits specific performance when damages are inadequate to compensate the non-breaching party.

Damages for Financial Losses

Damages are the most common remedy in real estate contract disputes. They aim to compensate the non-breaching party for financial losses incurred due to the breach.

Types of Damages

  • Compensatory Damages: Cover actual financial losses, such as repair costs, loss of property value, or expenses related to delays.
  • Consequential Damages: Address additional losses resulting from the breach, such as relocation expenses or missed business opportunities.

Relevant Law

California Civil Code Section 3300 defines the measure of damages in contract disputes as the amount that compensates for all detriment caused by the breach.

Punitive Damages

Punitive damages are awarded in cases involving fraud, intentional misrepresentation, or egregious misconduct. Unlike compensatory damages, punitive damages are designed to punish the breaching party and deter similar behavior in the future.

When Punitive Damages May Apply

  • The seller knowingly conceals significant defects or makes false statements about the property.
  • The buyer engages in fraud to manipulate the transaction.

Relevant Law

California Civil Code Section 3294 governs punitive damages, requiring evidence of malice, oppression, or fraud to justify an award.

How Bay Legal, PC Can Help

At Bay Legal, PC, our experienced attorneys specialize in helping clients pursue remedies for real estate contract violations. Whether you are seeking to rescind a contract, enforce specific performance, recover damages, or hold a party accountable for fraud, we will work tirelessly to protect your rights and achieve the best possible outcome.

Contact us today to schedule a consultation and learn how we can help you resolve your real estate contract dispute. Protect your investment with the trusted expertise of Bay Legal, PC.

Contact Bay Legal