SSUE

On August 1, 2021, Frank ("Seller") agreed to sell Judy ("Buyer") and Buyer agreed to purchase from Seller a commercial property in Sunnyvale, California for $1,950,000. Upon signing the contract that day Buyer paid a 10% "good faith" deposit to Seller. The sale was supposed to be closed by September 1st. The contract included a provision that "if Seller is unable to convey good, clear, insurable, and marketable title, Buyer shall have the option within 30 days of receiving notice of defective title to:

(a) accept such title as Seller is able to convey without reduction of the Purchase Price, or

(b) cancel this Agreement and receive a return of all Deposits."

Seller's examination of the Santa Clara County public records revealed that the property did not have marketable title and Seller notified Buyer of this fact on August 28th.Buyer offered Seller additional time to resolve the problem, and the closing did not occur on September 1st as scheduled.

Seller decided that "the deal was over" and on September 5th offered to return Buyer's deposit or sell her a different commercial property Seller owned in Santa Clara, California of the same acreage for the same price. Buyer refused and decided to exercise her option to accept the Sunnyvale property without marketable title. Buyer notified Seller of her decision on September 15th as required in the contract. Seller did not respond. Buyer then filed a lawsuit against Seller in Santa Clara County Superior Court on September 23rd to enforce the sale of the Sunnyvale property.

Initial Discussion Post

Answer the following questions:

1. Did Seller breach the contract? In whose favor should the court rule and why?
2. For purposes of this question, assume that Seller did breach the contract. What is the appropriate remedy and why?