Measure of Damages for Breach of Contract to Purchase Real Estate – Specific Performance

Cooper v. Durham, [Ms. SC-2022-0965, Aug. 25, 2023] __ So. 3d __ (Ala. 2023). The Court (Mendheim, J.; Parker, C.J., and Shaw, Wise, Sellers, Stewart, Mitchell, and Cook, JJ., concur; Bryan, J., concurs in the result) reverses the Circuit Court’s ore tenus judgment awarding Cody Durham, the buyer, damages for breach of a real estate purchase agreement based on the difference between the contract price and the fair market value in 2020 when the judgment was entered. The Court “decline(s) Durham’s entreaty to overrule Radetic [v. Murphy, 71 So. 3d 642 (Ala. 2011)] and the numerous other cases that have held that ‘[t]he measure of damages for the breach of a contract for the sale of land is the difference between the contract price and the market value at the time of the breach.’” Ms. *35, some internal quotation marks and citation omitted.

The Court also acknowledged that “because of the unique nature of real-property transactions, ordinarily the only remedy that can return the nonbreaching party to the position that the party would have occupied if the breach had not occurred is specific performance…. That is precisely why the law presumes that damages are not an adequate remedy for the breach of a contract involving the sale of real property.” Ms. *28. The Court notes that even though the determination that specific performance was not the proper remedy may have been legally incorrect, “Cooper’s appeal does not question that conclusion and Durham did not file a cross-appeal challenging Judge Graham’s judgment in that respect. Accordingly, we are not at liberty to reverse that portion of the trial court’s judgment.” Ms. * 36, n. 5.

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