Legal Question in Real Estate Law in Oregon

I signed a contract to sell my land to a builder thinking that I was giving him up to year to close on the sale. However, on closer examination of the contract, the year to close starts ticking after I would obtain an easement from the owner of a neighboring property. This was not my understanding when signing the contract, but this is the wording (mea culpa). However, after I had already signed this contract with the builder, the owner of the neighboring property decided that he wanted to buy my property, and therefore will not agree to the easement. Unless I agree to the builder's terms to cancel the contract (e.g. earnest money back plus lots of cash), he thinks that he could hold onto my property indefinately without closing and prevent me from selling to somone else. Is he correct? What can I do with this mess?


Asked on 5/06/13, 6:11 pm

1 Answer from Attorneys
Daniel Meek Daniel W. Meek

You can go to court to have the contract declared void due to frustration of conditions or due to your own breach of its conditions. You have probably breached the contract due to your inability to get the easement. The contract almost certainly has provisions that say what happens in the event of a breach of contract. Probably you get the land back and have to repay the earnest money to the buyer. The buyer is probably not entitled to anything more from you. If he is entitled to anything more, it would probably be the difference in the value of the property now and what he agreed to pay for it. Say the property now is worth $1 million and you had agreed to sell it to him for $800,000. Then you might conceivably have to pay him $200,000 in damages so that he receives the "benefit of the bargain." As noted above, it is likely that repaying the earnest money will be all that the court orders. It depends on what the contract says happens in case of breach or frustration of purpose due to unavoidable conditions.

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Answered on 5/07/13, 3:24 am


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