While it may not happen often, on occasion we have experienced situations where one of the parties “walks” from the transaction.  In this instance, the buyer or seller is often left in a difficult position and wondering what remedies they may have against the breaching party, if any.  A well drafted contract will typically set-forth default provisions to account for just this event.

So when is a party determined to be in default under the FAR-BAR Contracts?  A party is considered to be in default if the party fails, neglects, or refuses to perform seller’s obligations under the contract.

  • Examples of a seller default include: (1) not allowing access to the Property for inspections; (2) not providing disclosure documents to the buyer as required by Florida law; and (3) refusing to execute the closing documents at closing.
  • Examples of a buyer default include: (1) failure to deliver the deposit to the escrow agent within the time(s) specified; (2) failure to make a mortgage loan application for financing if Section 8(b) of either the “Standard” or “AS-IS” FAR-BAR contract is selected within the time specified; (3) failure to use diligent effort to obtain loan approval during the loan approval period; and (4) refusing to execute the closing documents and fund the transaction at closing.

So what are the non-defaulting parties remedies are against the defaulting party So when is a party determined to be in default under both FAR-BAR contracts?

  • Seller Default:  Pursuant to the terms of the contract, the buyer may elect to receive a return of the buyer’s deposit without thereby waiving any action for damages resulting from the seller’s breach, may seek to recover damages, and/or seek specific performance.  The most common remedy is for the buyer to request the return of their deposit and walk away from the transaction.  While this is certainly the path of the least resistance, it is not always an adequate remedy for a buyer who has spent a great deal of time and money prior to the seller default.  The damages available to a buyer can include due diligence expenses, moving expenses, loss of opportunity and alternative living expenses to name a few.  Another option is for the buyer to pursue the seller for specific performance of the terms of the contract.
  • Buyer Default: Pursuant to the terms of the contract, the seller may elect to recover and retain the deposit as agreed upon liquidated damages in full settlement of any claims, or, at seller’s option, proceed in equity to enforce the seller’s rights under the contract. Significantly, the FAR-BAR contracts do not specifically provide that the seller is able to recover damages in addition to the right to retain the deposit.  The siren should be going off in your head right now as this is a prime reason for the seller to demand a significant deposit when negotiating the terms of the contract.

The legal fees in these matters must typically be paid upfront and litigation fees can escalate quickly.  With that being said, both FAR-BAR contracts provide for prevailing party attorney fees and court costs in conducting the litigation.  While litigation is never an appealing option, there are times when the parties to a transaction are left with no other alternative.

For any litigation matter involving contractual default, it is important to have a well-documented history of the file, as these cases often come down to questions of fact.  An experienced real estate attorney can assist you in preparing and documenting the file throughout the transaction, which is why we always recommend engaging a real estate attorney to conduct the closing.


Berlin Patten Ebling, PLLC

Article Authored by William C. McComb,Esq.,wmccomb@berlinpatten.com

This communication is not intended to establish an attorney client relationship, and to the extent anything contained herein could be construed as legal advice or guidance, you are strongly encouraged to consult with your own attorney before relying upon any information contained herein.

All rights reserved. This copyrighted material may not be re-published without permission. Links are encouraged.



3700 South Tamiami Trail, Suite 200, Sarasota, FL 34239   P (941) 954-9991  F (941) 954-9992


247 Tamiami Trail South, Suite 201, Venice, FL 34285  P (941) 955-9991  F (941) 484-9992


8433 Enterprise Circle, Suite 100, Lakewood Ranch, FL 34202   P (941) 907-9022  F (941) 907-9024


442 West Kennedy Boulevard, Suite 312, Tampa, FL 33606  P (813) 467-7500  F (813) 251-1662

Did you find this real estate law content useful, but need actual legal counsel?

Speak to a real estate attorney!

, , , , , , , ,

Avoiding Litigation. The Married Seller Edition.

  This has been an incredible selling market. Real estate professionals are signing up their sellers, listing the property, and procuring offers in contract in short time periods. Time is of the essence, but it is important to make sure that you dot your “I’s and cross your “T’s” when it comes to not only…

Repairs In an As Is Contract?

  As the local real estate market continues to experience an unprecedented level of competition and lack of inventory, it is more important than ever to brush up on exactly what is and is not contained in the FAR/BAR residential contracts. The FAR/BAR “As Is” Residential Contract for Sale and Purchase (the “Contract”), which is…

Notice Something is Missing?

  Get it in Writing We know. You’re in the real estate industry. You’ve heard “get it in writing” a thousand times. That applies to contracts for the sale of property (I’m sure you’ve read a previous blog on Florida’s statute of frauds), and for any changes to the contract that the parties agree on.…