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CalAttorney2, Lawyer
Category: Real Estate Law
Satisfied Customers: 10244
Experience:  I am a civil litigation attorney with experience representing HOAs, homeowners, businesses and others in real estate matters.
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I have signed a contract and waived all my inspection

Customer Question

I have signed a contract and waived all my inspection period. I have not put my deposit into escrow, Can the seller sue me for the deposit if I cancel the escrow?
Submitted: 9 months ago.
Category: Real Estate Law
Expert:  CalAttorney2 replied 9 months ago.

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Expert:  CalAttorney2 replied 9 months ago.

Your seller can sue you for breach of contract if you cancel (your purchase agreement probably has a mediation and/or arbitration clause in it is so as a practical matter, this probably would go through alternative dispute resolution first rather than to litigation).

However, the measure of damages that you may owe the seller is not going to be measured (or limited) by the deposit - many parties will simply consider the deposit to be the measure of damages and leave it at that - but the seller's actual damages are going to be the costs incurred by losing the sale (so how much they incurred by not being able to sell as agreed upon - they could attempt to sue for "specific performance" and require that you purchase the home as agreed - but it is more likely that they would get a money judgment for actual damages).

Unfortunately, by waiving all of the contingencies, this makes it difficult to cancel the contract unless you can show the seller was engaged in some sort of fraud (a high bar).

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