Seller Entitled to Breach of Contract Damages after Buyer Defaults.

The plaintiff owned and operated a horse farm, where she taught riding lessons and boarded horses. When she decided to leave the country, she entered into a contract to sell the property to defendants, who purchased the property under a land contract. Plaintiff agreed to enter into the contract on the condition that the mother of one of the defendants would sign a personal guarantee. After two years of making monthly payments, the defendants were unable to obtain the financing necessary to make the final balloon payment due under the contract. The property value had dropped, and the defendants abandoned the property. Plaintiff sought to mitigate her damages by selling the property to a neighbor at a reduced price (only after providing notice to the defendants). The trial court granted a directed verdict in the amount of $178,093.89 for the plaintiff in her breach of contract action against defendants. On appeal, the court affirmed. Plaintiff was entitled to seek contract damages and mitigate those damages by selling the property. She did not, through the sale of the property, exercise the different remedy of foreclosure. There was consideration for the mother’s personal guarantee because the plaintiff agreed to enter into the contract only because of that guarantee.  Knox v. Briskin, No. 315003, 2014 Mich. App. LEXIS 465 (Mich. Ct. App.  Mar. 18, 2014).    

CALT does not provide legal advice. Any information provided on this website is not intended to be a substitute for legal services from a competent professional. CALT's work is supported by fee-based seminars and generous private gifts. Any opinions, findings, conclusions or recommendations expressed in the material contained on this website do not necessarily reflect the views of Iowa State University.

RSS​ Facebook Twitter