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Signing a Contract
Conveyancing Resource Centre

What happens if I am in breach of contract?

This question depends entirely on what is in your contract.

In most cases, depending on what is in your contract and whether it is standard form or not, the other side may be able to affirm the contract and sue you for:

  1. Damages; 

  2. Specific performance (an order compelling you to buy or sell the contract);

  3. Damages and specific performance; 

  4. Costs on indemnity (meaning the other side pays for the costs).

Alternatively, under most standard form contracts, if you are a seller and the buyer has breached the contract, you can do any of the following:

  1. Take possession of the property back if necessary;

  2. Take the deposit (the buyer forfeits this);

  3. Sue the buyer for damages;

  4. Resell the property and seek liquidated damages if there is any deficiency in the price, including the expenses connected with the resale (provided the resale settles within 2 years of termination of the contract);

  5. Sue the buyer for costs on indemnity (meaning the other side pays for the costs).

If you are the buyer on the other hand and the seller has breached the contract, in most standard form contracts, you may be able to do any of the following:

  1. Recover your deposit and any interest earned; 

  2. Sue the seller for damages; 

  3. Sue the seller for costs on indemnity (meaning the other side pays for the costs).

If you feel that you are at risk of breach of contract, or are otherwise in breach, you should consider obtaining immediate advice to mitigate your risks.

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