If a seller defaults in performance of a contract, any of the following actions would be likely to help the buyer recover any losses EXCEPT: A. suing the seller for specific performance. B. filing a complaint with the Real Estate Commission. C. canceling the contract and recovering the earnest money. D. bringing an action against the seller for payment of compensatory damages.
The correct answer and explanation is:
The correct answer is B. filing a complaint with the Real Estate Commission.
Explanation: If a seller defaults in the performance of a contract, the buyer has several legal avenues to recover any losses, but filing a complaint with the Real Estate Commission is generally not one of them in this context.
- Suing the seller for specific performance (A): Specific performance is a legal remedy in which the court orders the seller to fulfill the terms of the contract as agreed. In real estate transactions, where the subject matter is unique (such as a specific property), this can be a viable remedy if the seller defaults.
- Canceling the contract and recovering the earnest money (C): In many real estate contracts, the earnest money is a deposit made by the buyer to show good faith. If the seller defaults, the buyer may have the option to cancel the contract and recover the earnest money. This is often outlined in the contract itself as a standard remedy for the buyer in case of a default by the seller.
- Bringing an action against the seller for payment of compensatory damages (D): If the seller defaults, the buyer may sue for compensatory damages. These are financial damages meant to compensate the buyer for any losses incurred due to the seller’s failure to perform under the contract. The buyer can seek to recover any monetary losses resulting from the breach, such as additional costs in finding another property or price differences.
- Filing a complaint with the Real Estate Commission (B): While the Real Estate Commission regulates real estate agents and brokers, it does not typically intervene in disputes between buyers and sellers regarding contract performance. Complaints to the Commission are more appropriate for issues involving unethical behavior or misconduct by agents, not for breach of contract between the parties involved. Therefore, this option is not a likely course of action to help the buyer recover losses.
Thus, the most accurate answer is option B.