Barbara entered into a signed written contract with Sally to purchase Sally\'s h

Question

Barbara entered into a signed written contract with Sally to purchase Sally's house for $200,000 with a closing date of March 1. The contract contained all the essential elements and was an enforceable contract. Barbara changed her mind and told Sally on February 1 that she had decided not to buy the house. Sally re-advertised the house in the first week of February at a cost of $1,000. Sally ended up selling the house to Amy on March 1 for $195,000.

What amount of damages, if any, is Sally entitled to recover from Barbara based on these facts?

A.$6,000

B.$0

C.$5,000

D.$200,000

E.$199,000

Explanation / Answer

A.$6,000

Barbara entered into a written contract to purchase Sally's house for $ 200,000. The contract was enforceable, therefore, Barbara is bound by it. When she breached the contract by telling Sally that she will not purchase the house, Sally readvertised the house and incurred an expense of $ 1000. She also suffered a loss of $ 5000 (which is the difference of the amount that Barabara had signed a contract to purchase and the amount that Sally sold to Amy for) . The total loss suffered by Sally is 1000+5000 = $ 6000

Barbara, being bound by the contract, is responsible to make good for the loss suffered by Sally. and thefore, Sally is entitled to recover $ 6000 from Barbara.

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