Many of the remedies available for the breach of a purchase agreement is the same as basic contractual remedies. Primarily, remedies are going to be in the form of damages, forfeiture of payments (liquidated damages), and equitable remedies.

Damages and Forfeiture of Payments

There are several different types of damages and ways to calculate those damages. For instance, damages could include expectation loss, the monetary value parties were to gain had the contract proceeded without breach. However, these types of damages can be expensive to litigate, difficult to calculate, and difficult to recover in the case of a successful litigation. Rather than go through the complexities most contracts contain a provision requiring earnest money and stating that retention of the earnest money as satisfactory damages in the event of a breach. In other words, retaining or forfeiting the earnest money is a type of liquidated damage for a breach of contract.

Uzan v. 845 Un Limited Partnership

778 N.Y.S.2d 171 (Sup. Ct. 2004).


Whether the plaintiffs forfeited their 25% down payment.


When the contract results from lengthy negotiation between represented parties with equal bargaining power, and there is no evidence of overreaching, then a breach could result in the forfeiture of the down payment pursuant to the contractual terms.

Liquidated damages may only be made if the totals are reasonable and if calculating other damages would be difficult.


The plaintiffs forfeited the right to their down payment.


In 1998, the defendant began to sell condominiums at The Trump World Tower. The plaintiffs purchased four total units on floors 89 and 90 before construction began. Because the plaintiffs purchased several units, they were able to successfully negotiate the total price down by 7 million to 32 million. As part of the agreement, the plaintiffs were obligated to make a 25% down payment, 10% at the time of contracting and the remaining total to be made in two installments of 7.5% 12 and 18 months later. In the event of a default, and failure to cure, the defendant could retain the down payment as damages.

After 9/11, the plaintiffs began to worry about another terrorist attack on The Trump World Tower because of its location and prominence. Consequently, they failed to close and defaulted. After failure to cure, the defendants terminated the agreements and retained the 25% down payment.

At trial, the defendants were successful in obtaining a summary judgment grant for 10% of the down payment, but the rest of recovery was denied. So, defendant appealed.

Due to the rule stated above, the defendant was entitled to the full recovery of the 25% down payment.

Equitable Remedies

  • Specific Performance. A request for specific performance is that the court will require the parties to perform as promised. To do so, the party requesting specific performance must show that they were ready, willing, and able to perform at the time a breach occurred.
  • Reformation. If there is an error in the contractual terms, reformation could be requested to correct the error. To do so, the error must be a mutual mistake between the parties (the actual intent of the parties was not reflected).
  • Rescission. Rescission is when one party terminates the contract (without breaching) and may occur on grounds of fraud, misrepresentation, or mutual mistake.
  • Equitable Liens. A lien on either the purchase price or down payment secured by title on the property.

DiGuiuseppe v. Lawler

269 S.W.3d 599 (Tex. 2008).


Whether the appellate court errored in not allowing specific performance.


Specific performance requires the one enforcing performance to be ready, willing, and able to also perform.


There was not a showing that the plaintiff was able to perform, so specific performance is not an adequate remedy.


DiGuiseppe was to purchase over 750 acres from Lawler at 40,000 per acre. The downpayment was to be made a three stages (1) 100,000 at contract signing, (2) 100,000 upon submission for zoning, and (3) 400,000 upon approval of zoning that was acceptable as applied for. Zoning was approved for a different purpose other than that applied for but it was still acceptable. DiGuiuseppe failed to make the 400,000 deposit and so Lawler sought to terminate the contract. Despite the termination efforts, DiGuiseppe attempted to complete the purchase.

At trial, a jury awarded damages, but DiGuiseppe waived the damages in exchange for specific performance, which was permitted by the judge. This decision was appealed and he lost.


There was no finding that DiGuisepppe was actually ready, willing, and able to perform. Although he was willing, he was lacking the cash necessary to perform at the time. So, specific performance was not an appropriate remedy.

Potter v. Oster

426 N.W.2d 148 (Iowa 1988).

Oster had purchased property from Stark and sold the homestead on the land to the Potters on an installment contract basis. Oster then sold the remaining land to Bishop. Bishop failed to pay Oster, who in turn failed to pay Stark. Consequently, all parties were kicked off the land (including the Potters who had made all their payments in time). Here, the Potters are seeking to rescind the contract they had with Oster and recover restitution damages because Oster was unjustly compensated for the installment contract (rent being cheaper than the installment contract would have been).

The focus was putting the parties back to where they were before the enforcement of the contract. Any other remedy options would not have done that so rescission was the best remedy.


The content contained in this article may contain inaccuracies and is not intended to reflect the opinions, views, beliefs, or practices of any academic professor or publication. Instead, this content is a reflection on the author’s understanding of the law and legal practices.

Will Laursen

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