INTRODUCTION
Real estate transactions require well-drafted contracts to ensure smooth execution, whether in property sales or development agreements. However, breaches frequently occur, leading to disputes that may cause financial loss, project delays, and legal battles.
At CHAMAN Law Firm, we specialize in real estate law, helping clients navigate property-related disputes and enforce their contractual rights. Whether you are a buyer, seller, developer, or investor, understanding your legal remedies when a contract is breached is crucial. In Odutola v. Papersack (Nig) Ltd (2006) 18 NWLR (Pt. 1012) 470, the Court of Appeal affirmed that specific performance is often the best remedy in real estate disputes, as monetary damages may not fully compensate an aggrieved party. This case highlights the importance of legal intervention, which CHAMAN Law Firm provides to ensure clients get the best outcomes.
COMMON BREACHES IN PROPERTY SALES AND DEVELOPMENT AGREEMENTS
A breach of contract arises when one party fails to fulfill their obligations under a legally binding agreement.
In Kaydee Ventures Ltd v. The Hon. Minister of FCT (2010) LPELR-1679(SC), the Supreme Court ruled that the wrongful revocation of a property lease amounted to a breach, reaffirming the importance of contractual compliance in real estate transactions.
Common breaches include:
1.Failure to Transfer Legal Title – A seller refusing to transfer property ownership after receiving payment.
2.Defective Title – Selling a property with encumbrances or legal disputes.
3.Non-Payment of Purchase Price – A buyer defaulting on payment obligations.
4.Failure to Deliver Possession – A developer failing to hand over completed units.
5.Defective Construction Work – A developer delivering substandard or unfinished work.
If you are dealing with any of these breaches, CHAMAN Law Firm offers expert legal solutions to protect your rights and recover your losses.
LEGAL REMEDIES FOR BREACH OF CONTRACT IN PROPERTY TRANSACTIONS
When a contract is breached, the injured party has various legal remedies, including:
1. MONETARY DAMAGES
Damages compensate the injured party for financial losses suffered due to a breach.
a. General Damages
General damages cover foreseeable losses caused by a breach. In A.G. Rivers State v. A.G. Akwa Ibom State (2011) 8 NWLR (Pt. 1248) 31, the Supreme Court emphasized that damages should be awarded based on the natural consequences of the breach.
For instance, if a property developer delays a project, buyers can seek general damages for the financial inconvenience. At CHAMAN Law Firm, we have successfully secured damages for clients in real estate disputes.
b. Special Damages
Special damages cover specific financial losses that must be proven with evidence. In SPDC v. Tiebo VII (2005) 9 NWLR (Pt. 931) 439, the court held that special damages require strict proof.
If you have incurred extra legal fees, alternative housing costs, or lost investment returns due to a breach, CHAMAN Law Firm can help you recover these losses through special damages claims.
c. Liquidated Damages
Real estate contracts often include liquidated damages clauses, specifying the penalty for delays or non-performance. Courts generally enforce these clauses unless they are excessive.
For instance, in Dunlop Pneumatic Tyre Co Ltd v. New Garage & Motor Co Ltd (1915) AC 79, the court upheld a liquidated damages clause as a genuine pre-estimate of loss. At CHAMAN Law Firm, we help draft enforceable contracts that protect our clients’ interests.
d. Consequential Damages
Consequential damages cover indirect financial losses. In Hadley v. Baxendale (1854) 9 Exch 341, the court ruled that damages must be reasonably foreseeable at the time of contract formation.
For example, if a real estate investor loses rental income due to a developer’s breach, CHAMAN Law Firm can help recover those losses.
2. EQUITABLE REMEDIES
When monetary compensation is insufficient, the court may grant equitable relief, which ensures contract enforcement.
a. Specific Performance
Specific performance compels a party to fulfill contractual obligations. In Odutola v. Papersack (Nig) Ltd (2006) 18 NWLR (Pt. 1012) 470, the court ruled that specific performance is often the best remedy in property disputes.
At CHAMAN Law Firm, we have successfully obtained specific performance orders, ensuring that our clients get their rightful property ownership or agreed project completion.
b. Injunctions
Injunctions prevent a party from taking certain actions that could cause further harm.
In Kaydee Ventures Ltd v. The Hon. Minister of FCT (2010) LPELR-1679(SC), the Supreme Court granted an injunction to stop the wrongful revocation of a property lease. If someone is wrongfully developing your property, CHAMAN Law Firm can help obtain an injunction to halt illegal activities.
c. Rescission
Rescission cancels a contract, restoring both parties to their original positions.
In Swansea City Council v. Glass (1992) 1 WLR 1444, the court granted rescission due to misrepresentation. If you have been misled in a real estate transaction, CHAMAN Law Firm can help cancel the contract and recover your funds.
3. CONTRACTUAL REMEDIES
Many contracts contain self-enforcing remedies to manage disputes efficiently.
a. Penalty Clauses
Penalty clauses impose a fixed financial penalty for breaches. However, in Dunlop Pneumatic Tyre Co Ltd v. New Garage & Motor Co Ltd (1915) AC 79, the court ruled that excessive penalties are unenforceable.
CHAMAN Law Firm ensures that clients’ contracts contain fair and enforceable penalty clauses to prevent disputes.
b. Alternative Dispute Resolution (ADR)
Many real estate contracts require mediation or arbitration before litigation. The Arbitration and Conciliation Act, 1988 encourages ADR in property disputes.
In Statoil (Nig) Ltd v. Inducon (Nig) Ltd (2015) LPELR-24750(SC), the Supreme Court upheld an arbitration agreement, reinforcing the importance of ADR.
At CHAMAN Law Firm, we specialize in arbitration and mediation, helping clients resolve real estate disputes quickly and efficiently.
WHY CHOOSE CHAMAN LAW FIRM?
CHAMAN Law Firm has a proven track record in real estate law, helping individuals, businesses, and investors protect their property rights. Our expertise includes:
•Drafting and reviewing real estate contracts
•Litigation for breach of property contracts
•Securing specific performance and injunctions
•Recovering damages for aggrieved parties
•Resolving real estate disputes through ADR
CONCLUSION
A breach of contract in property sales or development agreements can lead to significant losses, but the law offers effective remedies. Whether through damages, specific performance, injunctions, or arbitration, CHAMAN Law Firm ensures that clients receive the best legal protection.
If you are facing a property dispute or need legal guidance on real estate contracts, contact CHAMAN Law Firm today. Our experienced team is ready to protect your rights and secure the best outcome for you.
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