## Facts

- Harold Reich listed his Lincoln, Nebraska residence for sale through Woods Bros. Realty, with broker Tim Francis handling the listing.
- Tim D. Ruble and Karen L. Ruble obtained loan preapproval and, on July 28, 1996, signed a written offer to buy the home for $83,000.
- The agreement included financing terms: the purchase was contingent on the buyers obtaining a $62,500 first-mortgage loan; the remaining funds were expected to come from proceeds of selling the buyers’ existing home.
- The agreement set a closing date of August 31, 1996, but also provided that if the lender had not completed loan processing by that date, the closing time would automatically extend until the lender, in the normal course of business, approved or rejected the loan.
- On August 16, 1996, the buyers informed Reich they could not close by August 31; in September, Reich stated he did not want to proceed with closing.
- On September 26, 1996, the buyers closed the sale of their own home, obtained funds for the down payment, and informed Reich they were ready to close; the closing on Reich’s property never occurred.
- The buyers sued Reich for breach of contract and sought consequential damages, including six months of rent at $775 per month incurred after the failed closing.
- Reich denied breach and filed a third-party complaint against Francis and Woods Bros., asserting they were responsible for any resulting damages.

## Issues

1. Whether the agreement’s financing and timing clauses automatically extended the closing date beyond August 31, 1996, and whether Reich breached by refusing to close after the buyers were ready to perform.
2. Whether rental payments incurred after the seller’s refusal to close were recoverable consequential damages, and whether the award should be limited by the buyers’ expected mortgage payments had the purchase closed.
3. Whether the listing broker and brokerage were liable over to Reich on his third-party claim.

## Decision

- The Nebraska Supreme Court affirmed the district court’s affirmance of the county court judgment.
- The court upheld the finding that the contract permitted an automatic extension tied to lender processing and that the buyers remained ready, willing, and able to perform when they tendered performance in late September.
- The court held Reich breached the purchase agreement by refusing to proceed with closing within the contractually extended timeframe.
- The court affirmed the award of consequential damages, including the buyers’ rental payments.
- The court affirmed judgment for Francis and Woods Bros. on Reich’s third-party complaint.

## Legal Principles

- A real estate purchase agreement clause extending the closing date pending lender action is enforceable; the initial calendar closing date is not necessarily an absolute deadline.
- A seller materially breaches by refusing to close when the buyer has satisfied financing conditions and tenders performance within the contractually permitted timeframe.
- Consequential damages are recoverable when they are the natural and probable result of the breach and were within the parties’ contemplation at contracting.
- In a residential purchase context, rental expenses incurred because the seller fails to convey can qualify as foreseeable consequential damages supported by proof of actual loss.
- A contracting party who refuses to perform is not entitled to shift liability to a broker or brokerage absent evidence that the broker’s conduct caused the breach or damages.

## Conclusion

The Nebraska Supreme Court affirmed liability against the seller for breach of a residential purchase agreement, enforced a loan-processing clause that extended the closing date beyond the stated date, and upheld an award of foreseeable rental expenses as consequential damages while rejecting the seller’s attempt to impose liability on the listing broker and brokerage.


Ruble v. Reich, 611 N.W.2d 844 (Neb. 2000)