Donovan v. Bachstadt, 91 N.J. 434, 453 A.2d 160 (1982)
Legal information, not legal advice. Verify against the cited opinion.
- Citation: 91 N.J. 434, 453 A.2d 160 (1982)
- Court / Year: Supreme Court of New Jersey, 1982
- Topic tags: remedies | equitable_conversion | damages | buyer_remedies
- Facts: Buyers contracted to purchase realty; the seller could not convey marketable title because of a title defect unknown to the seller when the contract was made. The buyers sought specific performance and, alternatively, damages. The central question was the measure of damages available to a buyer when a seller breaches an executory contract to convey land.
- Holding: The New Jersey Supreme Court (Schreiber, J.) held that a buyer may recover benefit-of-the-bargain (compensatory) damages, including the loss of bargain, when the seller breaches a contract to convey real estate — rejecting the old “English rule” that limited a good-faith seller’s liability to the return of the deposit. The buyer’s remedy is measured to put the buyer in the position full performance would have produced.
- Reasoning: Land-sale contracts are governed by ordinary contract-damages principles; the uniqueness of land supports the buyer’s strong claim to performance or to its monetary equivalent. The decision situates the buyer as the party for whom the law presumes the inadequacy of a mere deposit refund.
- Practical impact for CFD operators/buyers: Confirms New Jersey’s modern, buyer-protective remedies framework for executory land-sale agreements: a defaulting seller under a contract for deed faces benefit-of-the-bargain damages (or, given land’s uniqueness, specific performance) at the buyer’s election — the mirror image of the limited seller remedies in centex-homes-corp-v-boag-1974. For operators, it underscores that the seller’s title-delivery obligation at payoff is enforceable and that breach is not cured by a deposit refund.
- Good-law status: Good law; leading New Jersey authority on real-estate buyer damages.
- Source (retrieved): https://www.courtlistener.com/opinion/1947393/donovan-v-bachstadt/ · Verified: 2026-06-08
Jurisdictions that follow / cite: new-jersey
Disclaimer. Legal information, not legal advice. Confirm the opinion is still good law before relying on it.