A purchase agreement is a binding real estate contract between a buyer and a seller. The buyer agrees to pay a certain amount in exchange for ownership of the property. The seller then agrees to sell the property to the buyer. Different types of properties have their corresponding types of purchase agreements with respect to the usage of the property, as well as the specifications and conditions of the property. Multiple parties may be involved in the sale and purchase of the property, but the primary characters are the buyer and seller.
When one party fails to fulfill their duties as stated in the purchase agreement, the other party can sue or file a lawsuit against them.
How can you know if there has been a breach of contract?
The real estate purchase agreement establishes the terms of the transaction. It outlines each party’s rights and obligations toward the fulfillment of the sale. To show that there has been a breach of the purchase agreement, the suing party would have to prove the following:
- There is a valid written purchase agreement or real estate contract
- The suing party performed all their duties and responsibilities under the terms of the contract
- The defendant failed to fulfill their end of the agreement
- The claimant suffered damages because of the defendant’s breach
A real estate purchase agreement breach can look entirely different for buyers and sellers. When a buyer defaults, the seller can keep the earnest money or bring a lawsuit for damages. If a seller defaults, the buyer can sue them for specific performance. In California, you have four years from when the breach occurred to file a claim.
Do not sign anything before reading the fine print
Regardless of if you are buying or selling the property, only sign something after fully understanding what the contract is asking of you. Contingency clauses can be tricky, and you may be unaware that certain conditions must exist or happen before you can finalize the sale. Make sure the contract protects both parties.