Stanislav contractually agreed to sell a piece of land to Tien for $250 000. When the time came to transfer title, however, Stanislav refused to complete the transaction. Tien consequently refused to pay any part of the price and justifiably sued for specific performance. At that time, the market value of the land was $300 000. The case was not decided by a court for five years. The judge then held that Stanislav was liable for breach of contract. At that time, the land was worth $400 000. Which of the following statements is TRUE?

Question

Quizplus · Accepted Answer

The damages are calculated based on the difference between the contract price and the market value at the time of breach, which is $300,000 - $250,000 = $50,000. However, since the land's value increased to $400,000 by the time of the court's decision, Tien is entitled to the difference between the current market value and the contract price, which is $400,000 - $250,000 = $150,000.

Stanislav Contractually Agreed to Sell a Piece of Land to Tien