We signed a contract to sell a house in Baytown, Texas. The buyer requested an extension to close, which we approved. We amended the contract accordingly, and the buyer signed it. As part of the extension agreement, the buyer was supposed to pay a second earnest money deposit, but they failed to make that payment. Today was the deadline to close, and they did not finalize the purchase. We issued a termination request today, demanding the termination of the contract and the earnest money. Our agent mentioned that under Texas law, even though the buyer did not make the second earnest money payment and breached the contract, we might find ourselves unable to sell the property. This situation is not only unfair but also unreasonable. We are seeking guidance on our options in this case, as w
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I'm so sorry about that! So this appears to be a breach of contract. Under Texas law, “[t]he essential elements of a breach of contract action are: (1) the existence of a valid contract; (2) performance or tendered performance by the plaintiff; (3) breach of the contract by the defendant; and (4) damages sustained by the plaintiff as a result of the breach. (Smith Int'l., Inc. v. Egle Group, LLC, 490 F.3d 380, 387 (5th Cir.2007); Tyler v. Citi-Residential Lending Inc., 812 F.Supp.2d 784 (N.D. Tex. 2011).) This applies regardless of whether the agreement was written or done orally. Typically, the aggrieved party is entitled to be returned to the same position they were in before the breach. Based on what you’ve told me, you’ve got some strong reasons why a court should side with you. First, the buyer agreed in writing to the amended terms, which included paying a second earnest money deposit as part of the extension to close. They did not fulfill that obligation, which is a clear breach of contract. On top of that, they also failed to close by the new agreed deadline, causing you financial harm because you cannot sell or relist the property freely. Under Texas law, courts generally do not reward parties who breach written agreements, especially when their actions create hardship for the other party. Given that you acted in good faith by granting the extension and giving them a fair chance to perform, it would be unjust for the buyer to now block you from moving on with your property and prevent you from recovering your damages or the earnest money. You have some options you can explore: The quicker, informal option is to send a demand for performance. I drafted a template myself to help with this so you know it's legitimate - https://www.contractscounsel.com/t/document-form-checkout/119 The other option is that you can ask them to just break this deal. You can suggest they pay a fee to you as a result, but you can advise them of what I told you here.