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16. Which of the following is the buyer entitled to recover?
Assume that, for whatever reason, the buyer prevails in the suit against the owner.
On April 1, an owner and a buyer signed a writing in which the owner, in consideration of $100 to be paid to the owner by the buyer, offered the buyer the right to purchase Greenacre for $100,000 within 30 days. The writing further provided, «This offer will become effective as an option only if and when the $100 consideration is in fact paid.» On April 20, the owner, having received no payment or other communication from the buyer, sold and conveyed Greenacre to a citizen for $120,000. On April 21, the owner received a letter from the buyer enclosing a cashier's check for $100 payable to the owner and stating, «I am hereby exercising my option to purchase Greenacre and am prepared to close whenever you're ready.»
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A is incorrect. Even though specific performance is not available, the buyer would be entitled to more than nominal damages, which is a small sum awarded without regard to the amount of loss when the breach has caused no actual loss. Restatement (Second) of Contracts § 346 (1981). As discussed above, the buyer is entitled to recover expectancy damages.
B is incorrect. The buyer is entitled to more than the fair market value of the assignable option to purchase Greencare because the owner's breach ultimately caused the buyer to lose Greenacre itself and not just an option to purchase Greenacre. Moreover, determining the value of an assignable option might be difficult to quantify; to recover damages, the court must be able to determine the remedy with reasonable certainty. Restatement (Second) of Contracts § 352 (1981).
C is incorrect. Typically, expectation damages are not measured by the difference between the contract price, $100,000 and the resale price, $120,000. Expectancy damages are measured by the difference between the contract price, $100,000, and the fair market value of the property, Greenacre, at the time of the breach.