(Solved) Adams signed a contract in which he promised to sell his house to Jefferson for $225 000. The ...

Adams signed a contract in which he promised to sell his house to Jefferson for $225 000. The "deposit" to be paid was set at $4000, and the liquidated damages clause provided that the deposit would be forfeited in the event that the buyer breached the contract. The buyer did breach the contract. Because the cost of housing was falling, it was difficult, even after a reasonable time had passed, to find a new buyer. The highest offer was $218 000. Adams accepted. Which of the following is true with regard to Adams's remedies?

▸ Adams must sue for specific performance, which is the only remedy, an equitable remedy, available to the parties in land transactions.

▸ Adams would be entitled to damages for money lost — $7000 plus selling costs.

▸ Adams could ask the court to order an accounting.

▸ Adams could sue for an injunction to stop Jefferson from buying another house.

▸ Adams would be entitled to the $4000 only, if the court held that the deposit was an honest attempt of the parties to estimate damages.

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Adams signed a contract in which he promised to sell his house to Jefferson for $225 000. The ...

Legal Fundamentals for Canadian Business

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