What happens if a real estate contract is breached?

If a real estate contract is breached in California, the non-breaching party is typically entitled to damages that are intended to make them whole, such as reimbursement for the cost of the purchase or repair of the property. Under California Civil Code, if one party materially breaches the contract, that party must pay damages that are sufficient to compensate the other for all of the detriment caused by the breach, or the contract must be cancelled. Whether the non-breaching party can collect damages or cancel the contract depends on the severity of the breach. Minor breaches only allow the non-breaching party to collect damages, while more severe breaches will allow the contract to be cancelled. The non-breaching party may also be able to collect damages for any interest they paid due to the other party’s breach. In some cases, the parties may be able to work out a solution. For example, if the other party was late making a payment, the parties could agree to an extension. If the parties are unable to reach a solution, the non-breaching party can pursue legal action in California courts. Depending on the breach, the court may order the breaching party to fulfill their obligations under the contract, pay damages, or terminate the contract.

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What happens if a real estate contract is breached?

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