## Facts

- Sellers (the Roeschs) contracted on August 18, 1982, to sell their home in Huron, Ohio, to buyers (the Brays) for $65,000.
- The payment terms required $45,000 at closing and $20,000 payable upon the sale of the buyers’ home, without interest.
- About five days after contracting, the buyers informed the sellers they would not perform.
- Before the buyers’ repudiation, the sellers contracted to purchase a different home and, after the breach, borrowed $65,000 at 16% interest to meet that obligation.
- About one year after the breach, the sellers resold the original property to third parties for $63,500.
- The trial evidence indicated a weak housing market at the time of breach due to high interest rates.

## Issues

1. What is the proper measure of a seller’s damages when a buyer defaults on a real estate sales contract: consequential/holding costs, or expectation damages measured by contract price minus market value at breach?
2. When, and under what conditions, may a post-breach resale price be used as evidence of the property’s market value at the time of breach?
3. May a seller recover expenses of holding the property pending resale (e.g., taxes, insurance, utilities, maintenance, advertising, and interest on borrowed funds)?

## Decision

- The appellate court held that the seller’s recoverable damages are the difference between the contract price and the property’s market value at the time of breach.
- The court held that the seller may not recover expenses incidental to ownership pending resale as separate damages.
- The court held that a resale price may be used to determine market value at breach if the resale occurred within a reasonable time after breach and at the highest price obtainable.
- The court reversed in part and remanded for recalculation of damages consistent with these rules.

## Legal Principles

- Upon a purchaser’s default under a real estate sales contract, the seller’s damages are generally measured by contract price minus market value at the time of breach.
- Incidental post-breach ownership and carrying costs pending resale are not recoverable as damages under this measure.
- A subsequent resale price may be used as evidence of market value at breach only if the resale occurred within a reasonable time after the breach and at the highest price obtainable.

## Conclusion

The court required damages to be recalculated under the expectation measure (contract price minus market value at breach), permitted use of the later resale price only if it met the “reasonable time” and “highest price obtainable” conditions, and barred separate recovery of post-breach holding and carrying costs.


Roesch v. Bray, 545 N.E.2d 1301 (Ohio Ct. App. 1988)