Specific Performance vs. Seller

Can a seller terminate a “liquidated damages contract” by…

The box in paragraph 18(a,2) of the Real Estate Commission approved contract is checked, so that it is a “liquidated damages contract.” The seller does not want to close. Can the seller simply inform the buyer of its intent to terminate the contract and refund the earnest money check?

The fact that the seller has no specific performance remedy against the buyer does not preclude the buyer’s specific performance remedy against the seller. The box in paragraph 18(a,2) of the real estate commission approved form only affects the seller’s remedies against the buyer. Paragraph 18(b) of the Real Estate Commission approved contract form provides the purchaser a specific performance remedy against the seller regardless of how the box in paragraph 18(a,2) of the contract is checked. The seller cannot unilaterally terminate the contract simply by refunding the earnest money.

 

Jon Goodman is a shareholder with Frascona, Joiner, Goodman and Greenstein, P.C., a Colorado law firm. His practice areas include Real Estate,Brokerage Law, Contracts, Land Use, Leasing, Real Estate Title, Association Law, Business Law, and Finance. Contact Jon Goodman.

Disclaimer — Content is general information only. Information is not provided as advice for a specific matter, nor does its publication create an attorney-client relationship. Laws vary from one state to another. For legal advice on a specific matter, consult an attorney.

JONATHAN A. GOODMAN