A Rotten Deal for Sellers
Currently in Paragraph 26, this clause states that THE SELLER is LIMITED to retaining deposited sums PAID by the buyer if the buyer breaches the contract.
I ROUTINELY STRIKE THIS CLAUSE, at least initially, if I am representing the SELLER. (Non-lawyers are prohibited from practicing law. The striking of clauses requires the exercise of legal judgment under In re Harris 152 B.R. 440 (Bkr.W.D. Pa. 1993) and therefore is prohibited by real estate agents who are not lawyers in Pennsylvania. Therefore, a non-lawyer may not be able to adequately represent the interests of sellers.
It is inequitable for the Seller to be limited in the amount of damages when a Buyer doesn’t suffer the same limitation. It is fair that both the Seller and Buyer retain all of their potential remedies. However, if the Buyer insists on limiting the Seller, the Seller should request that the same limitation be inserted into the contract limiting the Buyer’s remedies to the amount of the deposit. Keep in mind again, a non-lawyer may push back at this since they do not possess the ability (legally) to draft that into the contract.
Theoretically, the limited damages clause would enable either party to show up at a closing and tell the other party, “thanks very much, I found a better offer, keep the hand-money deposit, have a nice day.”