2/15/2019 We just received an opinion from the Superior Court reversing a decision of the Court of Common Pleas of Chester County in a case claiming specific performance against a defaulting buyer.
The case involved clients who agreed to sell their home to a developer. The developer wanted only an easement so she could put in a road and develop her property in the rear. Our clients did not want to sell an easement and find themselves next to a road. The contract was prepared and signed giving the property owners the right to force the developer to buy the property if she defaulted. When the developer the Common Pleas Court refused to grant specific performance, rather saying the homeowners could keep the down payment (which was less than the developer offered for an easement!). The Superior Court reversed, saying it was an error for the Common Pleas Court to not award the entire purchase price as damages. This case is important because it clarifies the sometimes confusing damage paragraph of the standard PA Association of Relators® Agreement of Sale.
That clause allows a seller, who has not allowed the buyer to limit damages by checking a box in the form, to apply the deposit against the purchase price and sue the defaulting buyer for the full price of the home. This clause previously caused great confusion because may believe prior appellate authority made specific performance (forcing the buyer to actually buy) difficult if not impossible to achieve. This changes the focus to damages and allows the seller to force the buyer to pay damages in the full amount of the purchase price. This is a thin distinction from specific performance, but a meaningful distinction.