Legal Question in Real Estate Law in California

Re: What damages can I claim?

First, carefully review the purchase agreement to see what clauses may affect your rights and applicable procedures. You may have elected arbitration, in which case your remedy will be through that process and not in court. Your right to damages might also be limited for this type of breach by some provision of the agreement.

Whether you sue or arbitrate, at some point you will have the opportunity or duty to make your demands for damages. Most attorneys advise their clients to ask for almost every conceivable item of damages, and this may be good practice, but as a practical matter you are likely to get a lot less.

The attorney fees are likely to be a major item, and whether or not they are recoverable in a contract action in California depends upon whether there is an attorney fee clasue. No clause, no recovery.

Damages for breach of contract are usually limited to what is necessary to put the aggrieved party in the same or similar condition that he would have been in, had the contract been performed according to its terms. Damages for downstream consequences of the breach, such as living expenses, are recoverable if the defendant should have 'reasonably foreseen' that kind of financial injury to the plaintiff.

If you don't have an attorney fee clause, the economics of suit may not be favorable. If you want and expect the deal to close, and lack an attorney fee clause, you may be best off trying to negotiate with the seller for a reduction in price based on your claim for damages rather than going to court. Even arbitration could cost a high percentage of the claim.

Finally, consider whether small claims, with a $5,000 ceiling on demands, is appropriate.