Linnea contracts to buy Harriette's farm for $300,000 and puts $20,000 down.Then Linnea learns she is allergic to hay and repudiates the contract.If Harriette can sell the farm one month later for $290,000,she may:
A) keep Linnea's $20,000.
B) keep $10,000 of Linnea's down payment.
C) not keep any of the down payment money.
D) sue for specific performance.

Question

Quizplus · Accepted Answer

When a buyer repudiates a contract, the seller has the duty to mitigate their damages by attempting to sell the property to another buyer. If the seller is able to sell the property for a lower price than the original contract price, they may keep a portion of the down payment as compensation for their losses. In this case, Harriette may keep $10,000 of the down payment, as she was able to sell the farm for $10,000 less than the contract price.

Linnea Contracts to Buy Harriette's Farm for $300,000 and Puts