How JustAnswer Works:
  • Ask an Expert
    Experts are full of valuable knowledge and are ready to help with any question. Credentials confirmed by a Fortune 500 verification firm.
  • Get a Professional Answer
    Via email, text message, or notification as you wait on our site.
    Ask follow up questions if you need to.
  • 100% Satisfaction Guarantee
    Rate the answer you receive.
Ask Ray Your Own Question
Ray, Lawyer
Category: Real Estate Law
Satisfied Customers: 40993
Experience:  Texas Attorney for 30 years dealing in real estate
Type Your Real Estate Law Question Here...
Ray is online now
A new question is answered every 9 seconds

Arizona real estate question. My wife and I signed a

Customer Question

Arizona real estate question.
My wife and I signed a standard Arizona Dept of Real Estate purchase contract.
We deposited our earnest money.
During the process we decided we did not like the home anymore. It was after the standard contingencies had passed. Just before the loan was approved, I emailed them a letter that we were cancelling the deal.
We new we would lose our earnest money, but now the seller wants to sue us for non performance. I thought the max we could lose would be the earnest money.
Can they do that?
Submitted: 1 year ago.
Category: Real Estate Law
Expert:  Ray replied 1 year ago.

Hi and welcome to JA. I am Ray and will be the expert helping you tonight.The terms of the contract control here.This falls under 7b remedies.

See the contract below..

According to this contract if he accepted the earnest money he cannot sue you here.You may raise this as an issue in any such suit.You may want to look at my reference and yours too to make sure they are the same and have same language.

It appears once they accept the earnest money that covers their remedies here and thats it. You can raise this as a defense.

I appreciate the chance to help you tonight.Please let me know if you have more follow up.

Expert:  Ray replied 1 year ago.

Breach: In the event of a breach of Contract, the non-breaching party may cancel this Contract and/or proceed against the breaching party in any claim or remedy that the non-breaching party may have in law or equity, subject to the Alternative Dispute Resolution obligations set forth herein. In the case of the Seller, because it would be difficult to fix actual damages in the event of Buyer’s

breach, the Earnest Money may be deemed a reasonable estimate of damages and Seller may, at Seller’s option, accept the Earnest Money as Seller’s sole right to damages; and in the event of Buyer’s breach arising from Buyer’s failure to deliver the notice required by Section 2b, or Buyer’s inability to obtain loan approval due to the waiver of the appraisal contingency pursuant to Section 2m, Seller shall exercise this option and accept the Earnest Money as Seller’s sole right to damages. An unfulfilled contingency is not a breach of Contract. The parties expressly agree that the failure of any party to comply with the terms and conditions of Section 1d

to allow COE to occur on the COE Date, if not cured after a cure notice.

Expert:  Ray replied 1 year ago.

Again it appears under the standard contract that once they elect to take the earnest money as liquidated damages they cannot sue here.It would be a good affirmative defense for you if they sue.

If you can leave a positive rating when we are done it is always much appreciated.

Related Real Estate Law Questions