Here’s why. In August, 2003 Janet Morrow agreed to buy a house in Kawartha Lakes for $174,000, with a closing date of October 31. The contract was later amended, with the seller agreeing to ensure the oil tank was working properly, certain pipes were properly installed and repairs were made to the roof, garage and drainage system. They were to be done by Oct. 1.
Morrow visited the house with her inspector on October 14 and the inspector concluded that some of the repairs weren’t done. Morrow said if the outstanding items weren’t fixed, she would not close the deal.
The seller offered her $1,000 off the purchase price to close, which she refused and the deal fell apart. The seller ended up selling to someone else for $128,000, some $46,000 less than Morrow’s offer. He sued her for that amount. More
It seems reasonable for a homebuyer to assume that, if the seller promises something and then doesn’t deliver on that promise, then the buyer should be able to walk away from the deal. Not so. For example, if a seller warrants that all of the appliances will be in good working order on closing, and the buyer discovers the day before closing that one or more of them don’t work, the buyer will certainly be able to sue the seller for the cost of fixing or replacing the appliances — but refusing to close is not an option. Doing so could be a breach of the contract and could give the seller the option of suing for damages as in the case described in the article.