A real estate contract of sale or real estate purchase agreement is written with a large number of terms and conditions associated with the process of sale and purchase. Both selling and buying parties are required to manage a number of tasks during the period between the date when the contract is signed and the predetermined date for the closing of the deal. This duration usually lasts between 30 to 45 days. Any typical real estate contract for sale and purchase of a property is written with many pages that contains the terms and conditions to which both buying and selling parties have agreed. The party held responsible for breaking a real estate contract would be considered to be the one who would have responsible for complying with the particular terms and conditions but fails to comply with these contingencies.
If either selling party or the buying party does not succeed to fulfill the predetermined conditions written in the real estate contract such as the seller might be unable to make available an abstract of title exhibiting clear title to the house, for instance than the selling party would be considered as the defaulter who would face the consequences of breaking a real estate contract. Also, if the selling party removes an ornament from the property, which they have agreed to leave than the seller would be considered to have breached the agreement.
In such a breach, the buying party would have a number of legal right to claim for any monetary losses against the breaching party. As a consequence, the buying party who was determined to proceed the process of sale might agree to an amendment in the real estate contract regarding the title or the ornament and the price of the property or might quietly complete the real estate transaction before and then file a lawsuit against the seller to claim for the monetary losses as a result of the breach of contract.
On the other hand, if the buying party might fail to fulfill a contingency of the real estate contract such as the buying party might not succeed to get their mortgage loan approved, than the both parties would be free to leave the contract as the consequence.
It is recommended to use the process for dispute resolution, if mentioned in the real estate contract, in the event of a conflict between the buying and the selling parties involved in a real estate contract. A dispute resolution method usually calls for an arbitration, mediation or small court claims in case the compensation amount is under $ 5000. This would be a convenient, time saving and cost effective method to resolve the issue without the need of going to the court. In a dispute resolution method, both buying and selling parties have to submit their concerns to the arbitrator, mediator or judge and they would form a decision about the breaking of the real estate contract and which party should face the consequences. A real estate contract could also be written with a predefined liquidated damages that are required to be paid by the party who breaches the contract.