Van Nuys, CA asked in Contracts for California

Q: I am currently in the middle of a lawsuit due to breech of contract on a sale of my home. House is owned by 2 parties.

Other party decided to back out of sale before escrow and refused an inspection of property. Can both of us be sued or can other party only be sued for there backing out. What are my options? What can I do?

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

A: If a seller breaches a residential real estate contract, the buyer may sue for damages or specific performance. A suit for damages is either for a specific amount set by the contract (liquidated damages) or for the actual amount of damages suffered, as calculated by statute. (Civil Code sections 3300 or 3306). Damages may include: the price paid, expenses incurred, lost market value, consequential damages, and, possibly, interest.

A suit for specific performance, if successful, requires the seller to turn over the property to the buyer. The law generally presumes that every property is unique, and therefore, the failure to transfer real property, such as a house, cannot be compensated with monetary damages.

However, a buyer cannot receive both damages and specific performance. Buyer must choose one or the other. Usually, in addition to damages or specific performance, the buyer may recover attorneys fees and costs from the seller. Punitive damages are usually not recoverable in a breach of contract action.

With regard to the co-owner’s alleged breach of contract, the other co-owner(s) may be jointly and severally liable, under various theories including: as a party to the contract, through a partnership or joint venture, under a principal-agent relationship, or under California Civil Code section 1659 (“Where all the parties who unite in a promise receive some benefit from the consideration, whether past or present, their promise is presumed to be joint and several.”) and Civil Code section 1660 (“A promise, made in the singular number, but executed by several persons, is presumed to be joint and several.”).

Please note that your California residential purchase and sale agreement may have provisions for mediation and/or arbitration. However, if you delay, you may waive your right to mediate and/or arbitrate.

The above statements are general and are not legal advice. Since you have been sued, you need to find a lawyer to represent you immediately.

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