Escondido, CA asked in Contracts and Real Estate Law for California

Q: We signed housing contract on Monday escrow opened and on Wednesday night we realized we made a big mistake.

How can we back out of this contract?

Related Topics:
1 Lawyer Answer
Nathan Wirtschafter
Nathan Wirtschafter
PREMIUM
Answered
  • Encino, CA
  • Licensed in California

A: “A big mistake” could mean many things.

Generally speaking, if the Seller has breached the contract, the Buyer has three options: (1) finding a loophole in the contract to walk away; (2) suing for damages in an action for breach of contract; and/or (3) filing a lawsuit for specific performance.

First, real-estate purchase contracts contain various contingencies, which if not met, allow the Buyer to cancel the agreement. For example, some contracts include a contingency that the property appraise for no less than the purchase price. If the property fails to appraise, the Buyer may be able to cancel.

Second, the Buyer may be able to recover damages, including expenses, based upon either a liquidated damages clause or California Civil Code sections 3300 and 3306.

Third, the Buyer may be able to force the Seller to complete the transaction. (However, this option does not seem to be applicable to your situation.)

Separately, if the Seller lied about the property or failed to disclose required information, you may have tort and/or statutory remedies as well.

Obviously, every case, like every price of property, is different, and you should quickly seek representation from a competent attorney.

Justia Ask a Lawyer is a forum for consumers to get answers to basic legal questions. Any information sent through Justia Ask a Lawyer is not secure and is done so on a non-confidential basis only.

The use of this website to ask questions or receive answers does not create an attorney–client relationship between you and Justia, or between you and any attorney who receives your information or responds to your questions, nor is it intended to create such a relationship. Additionally, no responses on this forum constitute legal advice, which must be tailored to the specific circumstances of each case. You should not act upon information provided in Justia Ask a Lawyer without seeking professional counsel from an attorney admitted or authorized to practice in your jurisdiction. Justia assumes no responsibility to any person who relies on information contained on or received through this site and disclaims all liability in respect to such information.

Justia cannot guarantee that the information on this website (including any legal information provided by an attorney through this service) is accurate, complete, or up-to-date. While we intend to make every attempt to keep the information on this site current, the owners of and contributors to this site make no claims, promises or guarantees about the accuracy, completeness or adequacy of the information contained in or linked to from this site.