A breach of contract occurs when one party does not complete his or her requirements under a contract. Sometimes these issue may be worked out between the parties, but when it cannot, litigation is the next best option. The non-breaching party to the contract has two options when bringing the case to court, either ask for the contract to be cancelled or ask for it to be enforced. The option best you depends on your needs and goals.
Take for example the New York case of Smith v. Tenshore Realty, Ltd. In this case Verna Smith and Loubelle Smith (the Smiths) are suing Tenshore Realty, Ltd. (Tenshore) for breaching their contract to purchase an apartment within a condominium. The Smiths resided in the same apartment for about ten years when they decided they wanted to buy it from Tenshore. The parties entered into an agreement with a series of provisions including those which provided rules that would cancel the contract without either party being liable.
The provision at issue in the case is the clause which allows for the cancellation of the contract if the Smiths are unable to get a loan to purchase the property. This is a common portion of most real estate arrangements. The Smiths were given twenty days to secure financing for the purchase. On the twentieth day, the Smiths sent Tenshore a fax, reminding it of the clause and asking for an extension because they were still waiting for information regarding the status of their loan application. At the end of the same day, the Smiths received confirmation from their bank that they would receive the loan and informed Tenshore that same day.
Tenshore claims that the fax the Smiths sent was a request for an extension and a conditional request for cancellation. Tenshore argued that when it refused the extension it had the option of accepting the cancellation. Therefore after receiving the fax, Tenshore accepted the cancellation and refused to continue with the sale of the property. After reviewing the facts, the court however, disagreed. Upon review of the fax, the court found that the Smiths did not ask for a cancellation but was reminding Tenshore of the contract clause which allowed the contract to cancel in case they could not get a loan before the deadline. The evidence was sufficient to show that the Smiths contacted Tenshore by the deadline. Therefore the court found that the contract was not be cancelled.
The Smiths requested specific performance because they wanted to enforce the contract and complete the sale. To get specific performance of a contract, the plaintiff, in this case the Smiths, must have substantially performed its contractual obligations and must be willing and able to perform its remaining obligations and the defendant, in this case Tenshore, must be able to convey the property, and that there cannot be an adequate remedy at law. The Smiths were able to show that they were to purchase the property, and Tenshore still had the property available for sale. Real estate is almost always seen as unique under the law, therefore all requirements were satisfied and the Smiths were able to purchase their apartment.
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