PSI Virginia Real Estate Practice Exam

Which remedy is available to a buyer in the event of a breach of contract?

1. Calling for a meeting with the seller

2. Terminating the contract and recovering the good-faith deposit

3. Forcing the seller to perform the contract

4. Changing the terms of the contract unilaterally

The correct answer is: Terminating the contract and recovering the good-faith deposit

In the event of a breach of contract, a buyer has the remedy of terminating the contract and recovering the good-faith deposit. This option acknowledges the buyer's right to exit the contract without penalty in the case that the seller fails to uphold their obligations as stipulated in the agreement. Termination alleviates the buyer from the contract's constraints, allowing them to seek other opportunities, and recovering the good-faith deposit safeguards the buyer’s initial investment. This remedy is often grounded in the legal principles of contract law, which aim to restore the injured party—here, the buyer—to their original position prior to entering the contract. The good-faith deposit, typically paid to demonstrate genuine intent to purchase, is rightfully returned to the buyer when a breach occurs, reinforcing the idea that buyers should not unfairly lose money due to a seller's failure to meet agreed-upon terms. The other options, such as calling for a meeting with the seller, while potentially reasonable attempts to address concerns, do not provide a formal remedy under breach of contract. Forcing the seller to perform the contract could be seen as a possibility in certain scenarios, such as when specific performance is sought, but it is not available in all cases and does not ensure the recovery of