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Breaching a real estate contract

On Behalf of | Jul 8, 2020 | Firm News |

You are ready to buy a home. You have probably followed the market or had your eye on a particular property or neighborhood for some time, and you want to make a move. On the other hand, you may be ready to sell your home, find something that better suits your growing family or downsize for your retirement. Whatever your situation, you will be dealing with many legal issues, and that means using contracts.

The real estate sales contract legally binds you to follow through with the sale or purchase of the property. This can seem daunting since buying a house is one of the most expensive and comprehensive commitments a person can make. Fortunately, most sales contracts contain contingencies that allow either party to back out of the transaction. You will want to be certain your contract has some very important contingencies.

Negotiating contingencies

When you agree to sell or purchase property, you do so while many factors are still uncertain. For this reason, good contracts will contain clauses that excuse one or both sides from the legal bond if certain factors arise, such as any of the following:

  • The buyer’s financing falls through.
  • The seller is unable to find new housing that is suitable.
  • The appraisal does not match the purchase price.
  • The home inspection reveals serious material defects.

A contract must be clearly express all contingencies so there is no confusion. It is wise for both parties to get together and discuss the terms of the contract. In fact, you or the other party may even wish to negotiate certain contingencies, but this is not required.

Were all contingencies met?

One party who backs out of the deal even after all contingencies have been satisfied may leave the other party out hundreds or even thousands of dollars. If you or the other party wants out of your contract at this point, you may find it is possible to negotiate new terms. However, nothing requires the other party to renegotiate once the terms of the contract are satisfied.

If you are a real estate buyer or seller who is left holding a valid contract after the other party backs out, you may have grounds for a claim of breach of contract. This can be a complex undertaking, but a successful legal claim may help you recoup some of your losses or even force the sale. Seeking advice from an experienced Texas attorney is a wise first step.


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