No Carrying Costs In Breach of Real Estate Contract Dispute

Among other claims, the Olmsteads sued the Goldmans for breach of contract to purchase residential real estate.   The trial court rendered judgment in favor of the Olmsteads and awarded them damages and attorney fees; the Goldmans appealed.  The Court of Appeals partially reversed, holding that the Olmsteads take nothing on their claims and remanded the issue of attorneys’ fees.  The Court found that the trial court erred by awarding the Olmsteads damages based on the carrying costs of the house after the Goldmans breached the contract until the house was sold.  The proper measure of damages was the difference between the contract price and the market value of the house on the date the Goldmans breached the contract, which was zero.  The court reasoned that non-breaching sellers should not be awarded the post breach costs of ownership because it could “incent the seller to hold the property indefinitely while waiting for market conditions to change, or for a purchaser willing to pay a specific price.”

Goldman v. Olmstead