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Breach of Contract in Land Laws

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If someone breaks a contract, the other party can generally sue and win some form of damages. But for centuries, the law has considered land to be unique. And so, a lawsuit that involves a broken agreement for a sale of land will usually result in an order of specific performance.

Is this ancient rule still reasonable? If someone backs out of an agreement to sell an acre of land, should he be ordered to turn over the land itself? Why not just require him to pay an appropriate number of dollars in damages?

In your response, pay particular attention to:
- Breaching Contract
- Expectation, Reliance & Restitution Interest
- Specific Performance, Injunction & Reformation

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Solution Summary

The answer to this problem explains why a broken agreement for sale of land will usually result in an order of specific performance.The references related to the answer are also included.

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In case of land sale, orders of specific performance are granted when dollar damages are evaluated to be not adequate. The rule of equity applies in this case and specific performance is ordered by the courts only when damages are perceived to not adequately compensate someone for the inability to own a particular real property. Specific performance is provided by giving the plaintiff the right to possess land. In case of sale of land, where the vendor does not give the title to the plaintiff, the court insists on specific performance because no other remedy exists to put the non-breaching party in the same position had the contract not been performed. The justification for specific performance is that the land would have a special value to the buyer so that damages would be inadequate recompense. The leading principle used in case of land is that 'equity regards as done that which ought to be done' (See: Walsh v. Lonsdale). Specific performance is ordered only on equitable grounds.
The main point is whether in equity or good conscience, the court should specifically ...

Solution provided by:
Hatim Baxamusa, MBA
Education
  • BSc , University of Calcutta
  • MBA, Eastern Institute for Integrated Learning in Management
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