[CNJNLUV]

Buyer A buys a house and a large lot in an upscale neighborhood. The previous owner left the property a mess and Buyer A's new neighbors were delighted by the prospect of Buyer A cleaning up the place. Both neighbors had their homes up for sale and knew that if Buyer A spruced up the house and his two acre lot, it would raise the potential sale price of their properties.

Buyer A contracts with a home and garden center for house renovation, painting, etc. and a complete re-seeding of his extensive lawn. He pays the full contract price upfront and the home and garden center begins work. Three weeks later, they stop work and the house and lot are in even worse shape.

Questions:

What damages can Buyer A recover?

Can the neighbors sue and recover from the home and garden center because they both sold their houses at prices below the neighborhood norm?

[LisaB4657]

Great homework questions!

Tell us what you think the answers are and we'll tell you if you're right.

[Fr_Chuck]

What do you think, tell us your opinion and we will give you help with this homework ( sounds like real estate course to me)

[CNJNLUV]

From what I can tell, the home and garden center breached their contract with Buyer A (during performance by stopping work partway through the project) so the measure of damages would be the cost of completion -- reasonable compensation for any delay in performance and even if the home and garden center finishes late, the measure of damage from the loss of use of the house and the lawn.

I'm stumped on the recovery of the neighbors

[LisaB4657]

Very good on the first one. The cost of completion would be a definite recovery. Compensation for delay and loss of use may not be recoverable, though. It depends on whether there was any fine print in the contract between Buyer A and the home and garden center which disclaimed liability for those things. It also depends on exactly how much of a delay there is. Reasonable delays (such as for weather or back-ordered material) are allowed.

As for the neighbors, was there a contract? Did the neighbors have a right to rely on Buyer A's contract? Look at the elements required for a third party beneficiary.