On March 21, 2013, in White v. Farrell1 the New York Court of Appeals declared for the first time the measure of damages to be applied in a real property seller’s action against a breaching buyer. White’s principal holding adopted, albeit with clarification, the "date-of-breach" rule long applied in the Appellate Divisions. White may prove more significant for its secondary if not tertiary holding that a seller suing for damages exceeding a retained down payment must seek to mitigate its damages by attempting to resell the property at a reasonable price.

It remains to be seen whether courts applying White’s mitigation holding will treat a seller’s failure to make sufficient resale efforts as grounds for denying damages that might have been recouped through resale, or as only a factor going to the weight given to a resale price offered as probative of date-of-breach damages. In either case, mitigation must now be considered not only by litigators presented with a fully framed real estate contract claim but by counsel when drafting contracts of sale and when advising parties after a breach. This article reviews White with emphasis on issues presented by its mitigation holding, and suggests approaches sellers’ counsel might consider when seeking to avoid handing a breaching buyer a "failure to mitigate" defense.??

‘Date-of-Breach’ Measure

This content has been archived. It is available through our partners, LexisNexis® and Bloomberg Law.

To view this content, please continue to their sites.

Not a Lexis Subscriber?
Subscribe Now

Not a Bloomberg Law Subscriber?
Subscribe Now

Why am I seeing this?

LexisNexis® and Bloomberg Law are third party online distributors of the broad collection of current and archived versions of ALM's legal news publications. LexisNexis® and Bloomberg Law customers are able to access and use ALM's content, including content from the National Law Journal, The American Lawyer, Legaltech News, The New York Law Journal, and Corporate Counsel, as well as other sources of legal information.

For questions call 1-877-256-2472 or contact us at [email protected]