When you make the decision to buy or sell a property, whether it’s a home or a commercial property, you expect the other party to follow through on everything they say they’ll do. But what happens when the buyer or seller doesn’t fulfill their end of the bargain? This means they’re in breach of contract and you’ll want to speak with a California real estate litigation lawyer. Before you contact your attorney, there are a few things you need to understand about breach of contract as it pertains to real estate transactions.

real estate contract

The Types of Real Estate Breaches of Contract

There are four main types of breaches of contract in real estate transactions and each one can end up with a different resolution or settlement. 

1. Minor Breaches

Minor breaches occur when one of the parties involved in the transaction violates their sales contract in a way that’s typically considered inconsequential. That means the breach won’t likely cause the transaction to fall apart and can likely be remedied quickly or generally ignored by the other party. 

Minor breaches include things like the seller not including an appliance or piece of furniture they agreed to include in the sales contract. Typically, this type of violation is resolved by telling the seller of the violation and receiving some kind of compensation from them to offset the breach.

2. Material Breaches

Material breaches occur when the breach of contract negatively impacts the other party in a way that results in a significant loss. The most common type of material breach occurs when the buyer refuses to close on the property, withholds payment, or otherwise refuses to complete the sale as agreed. The result is significant financial loss for the seller which can easily be proven in court. 

3. Actual Breach

Actual breaches occur when the buyer or seller doesn’t fulfill a term outlined in the sales contract. Actual breaches can be minor or severe, lead to the failure of a sale, or cause both parties to reevaluate the contract and ultimately fulfill their end of the agreement. Often, these breaches are accidental and are easy to remedy without pursuing legal action.

4. Anticipatory Breach

Anticipatory breaches are ones that haven’t happened at the time that the other party is informed of a change of plans. Often, it occurs when a buyer or seller informs the other party that they won’t be at closing which could signal that they intend to not follow through with the terms of the sale. Once closing happens and the other party doesn’t show, they’re in breach of contract. It effectively gives the other party a warning that something is going to happen.

What Can You Expect if You File a Breach of Contract Case?

When you file a breach of contract case with your California real estate litigation attorney, you may receive damages based on the type of breach you experienced. For example, if you suffered a minor breach and an item wasn’t included in the sale that should’ve been, you could be entitled to receive the item or compensation to purchase a new version of the item. If you suffered an actual breach and the sale fell through, you could be entitled to money to help cover the financial loss you experienced. Every case is different and the exact damages you’ll receive will depend on the breach in question.

Consult With an Attorney

If you believe you’re the victim of a breach of contract in real estate, the best thing you can do is speak with an attorney. Contact Jackman Law today to schedule a free consultation.