It is not an uncommon occurrence: hands have been shaken, the contract signed, the deal, for all intents and purposes, finalized…and then someone gets cold feet. Whether buyer or seller, it is not uncommon for individuals to wonder if they made the right decision. After all, purchasing and selling real estate is a big deal. This is especially true when the deal does not go as smoothly as anticipated. Sometimes, deeds are hard to come by, and in others, money gets tight. Yet, these are problems that both buyer and seller should have thought about beforehand, as trying to renege on a commercial real estate deal is a huge no-no. In fact, breaching a real estate contract can result in bigger problems than lost titles.

Commercial real estate is not easy to come by, and it is certainly not easy to sell. When a seller backs out of a contract, it can take the buyer months or even years to find a comparable property in the same location. When a buyer backs out, the seller loses expected capital and is forced to go through the selling process all over again. Whether you are the intended buyer or seller of a breached commercial real estate contract, know that remedies are available. To learn more about what those remedies are, reach out to the Alabama commercial real estate attorneys at Cloud Willis & Ellis today.


There are five types of legal remedies a person or entity may pursue for the breach of a commercial contract in Alabama:

  • Monetary damages;
  • Restitution;
  • Rescission;
  • Reformation; and
  • Specific performance.

Monetary Damages

Monetary damages are awarded when a financial loss occurs as a result of contract breach. This typically applies when a seller is responsible for the infringement, though it can occur when the opposite happens. For instance, say a buyer planned to expand his or her operations to a new warehouse and began transporting materials and equipment to the property once the contract was signed and the deal “done.” Halfway through the process, the seller backs out. Now the buyer has to pay to move everything back into the old warehouse or, if the equipment was new, pay for storage until he or she can find a new building. The seller may be liable for costs associated with the false move. In addition to recovering costs for moving, the buyer may also be able to recover damages for potential lost profits that an expansion would have earned him or her.

On the other hand, if the buyer backed out at the last minute, the seller might be entitled to monetary damages in the amount the net earnings he or she would have gained had not the breach occurred. Both this type of breach and a seller’s breach would be considered total breaches. In a total breach, the injured party is entitled to an amount of compensation equal to what he or she would have earned had the terms of the contract been fulfilled.

A partial breach is different, but it is not typically something that would occur in a commercial real estate transaction. However, that is not to say it could not occur. For instance, a buyer may only agree to buy a piece of commercial property if the seller agrees to make certain repairs or modifications. But, when the deal is done and both parties are set to walk their separate ways, the buyer may realize that the seller did not uphold his or her end of the deal. If something like this occurs, the plaintiff may be able to recover damages for the work not completed. 

A Real Estate Attorney Can Help Defend Your Legal Rights 

Monetary damages are the most common type of damages awarded in breach of commercial real estate contract cases. Specific performance, which will be explained more in depth in our next post, is generally the courts’ go-to remedy in cases of commercial real estate transactions gone bad. If you were set to buy or sell a piece of commercial real estate only to have the other party pull out of the agreement, and if you sustained losses as a result, reach out to the Alabama real estate attorneys at Cloud Willis & Ellis to learn more about your legal options. If recovering monetary damages is not possible, restitution, rescission, or specific performance remedies may still be an option. Contact our law firm today to get started.