In a fluctuating real estate market, the difference between the agreed upon contract price of a home and the market value at the time for performance can be substantial. Sometimes, the change is in favor of the buyer, and other times, it is in favor of the seller. A substantial drop in value, however, presents a problematic twist to breach of contract matters in New York. Should the seller of real estate receive damages for the difference between the amount he would have received under the contract that was breached and the amount for which he ultimately sold the property?
New York’s highest court recently issued a ruling relating to this issue. In that matter, a buyer breached a real estate contract in July of 2005. The seller was not able to sell the property until early 2007, at a price that was approximately $400,000 less than the purchase price under the original contract. The sellers wanted compensation for that loss. The judge, however, cited New York’s time-of-breach rule. Therefore, the buyers are responsible for damages that reflect the fair market value at the time they breached the agreement, which may differ from the contract price.
For a buyer to avoid liability in a breach of contract matter in New York, he would have to demonstrate:
- The seller actively engaged in deception.
- The seller concealed relevant facts about the property.
- The buyer could not have discovered the truth even when using ordinary intelligence.
For more information about pursuing a claim following a New York breach of contract, contact an experienced New York business litigation lawyer today. Call our office at (888) 497-3410 for a free consultation.