A real estate breach of contract occurs when one party to a property-related agreement fails to perform as promised. These disputes can derail closings, cloud title, disrupt financing, or cause significant financial loss for buyers and sellers.
We represent clients across Chicago and the surrounding counties in real estate breach of contract disputes, helping them enforce agreements, defend against improper claims, and resolve conflicts efficiently.
What Is a Breach of a Real Estate Contract?
A breach of a real estate contract happens when a party does not meet a legal obligation required by the agreement. This can include missed deadlines, refusal to close, failure to pay, incomplete repairs, nondisclosure issues, or conduct that undermines the purpose of the transaction.
Not every dispute qualifies as a breach, and not every breach justifies a lawsuit. Determining whether a claim is enforceable often requires careful analysis of the contract terms, contingencies, timelines, and the parties' conduct.
Key Elements of an Enforceable Real Estate Contract
To pursue or defend a breach of contract claim, the agreement itself must generally be enforceable. Most Illinois real estate contracts include:
- A clear agreement between the parties
- Consideration, such as money, property, or lease rights
- Definite terms, including price, property description, and deadlines
- Legal capacity of all parties
- Compliance with required writing and signature formalities
Disputes often arise when contract language is vague, incomplete, or poorly drafted - particularly around contingencies, repair obligations, or closing conditions.
Common Types of Real Estate Contract Breaches
Material Breach
A material breach goes to the heart of the agreement and defeats its primary purpose. Examples include refusing to convey title, failing to close after conditions are satisfied, or withholding possession of the property. These disputes often justify termination or court-ordered enforcement.
Minor or Technical Breach
A minor breach involves a limited failure that does not destroy the overall deal, such as a small repair issue or short payment delay. These cases typically focus on damages rather than undoing the transaction.
Anticipatory Breach
An anticipatory breach occurs when a party clearly indicates - by words or conduct - that they do not intend to perform. This allows the non-breaching party to act before a critical deadline is missed.
Actual Breach
An actual breach happens when performance is due and does not occur, such as failure to pay rent, refusal to close, or failure to complete required work.
Legal Remedies for Breach of a Real Estate Contract in Illinois
Depending on the circumstances, Illinois law provides several potential remedies:
Monetary Damages
Damages may compensate for financial losses such as price differentials, lost rent, carrying costs, repair expenses, or transaction fees caused by the breach.
Specific Performance
Because real property is considered unique, courts may order the breaching party to complete the transaction rather than pay damages - especially in purchase and sale disputes.
Liquidated Damages
Some contracts include predetermined damages, such as forfeiture of earnest money. These clauses must reasonably estimate anticipated losses and cannot function as penalties.
Contract Termination
In some cases, terminating the contract and restoring the parties to their pre-contract positions is the most practical solution.
Disclosure Issues and Contract Breach Claims
Failure to disclose known property defects can intersect with breach of contract claims, particularly in residential transactions. These disputes often involve whether disclosures were accurate, complete, or timely, and may overlap with claims under the Illinois Real Property Disclosure Act. Our misrepresentation and disclosure disputes page covers these issues in detail.
Noncompliance with the Illinois Real Property Disclosure Act can expose sellers to serious legal and financial risk. When known defects are withheld, minimized, or inaccurately disclosed, buyers may pursue claims alleging breach of contract, statutory violations, or related misrepresentation. Courts may award damages tied to the cost of repairs, loss in property value, or other measurable harm caused by the nondisclosure. In certain cases, sellers may also face liability for the buyer's attorney's fees, significantly increasing the overall exposure beyond the original transaction.
Breach of Real Estate Contracts FAQs
What should I do if I suspect a seller failed to disclose property defects?
If you believe a seller failed to disclose known issues with a property, it's important to act promptly. Start by documenting any defects you discover with photos, videos, and written notes. Review the seller's disclosure statement carefully for omissions or inconsistencies. Consulting a real estate attorney early can help you evaluate whether nondisclosure may support a breach of contract or statutory claim. From there, you can work with counsel to gather relevant records, inspections, and communications and determine whether negotiation or legal action is appropriate to protect your interests.
What happens if a real estate contract is breached before closing?
If a real estate contract is breached before closing, the non-breaching party may have several options depending on the contract terms and circumstances. These can include seeking monetary damages, enforcing the contract through specific performance, or terminating the agreement and recovering deposits or expenses. A real estate litigation attorney can help determine which remedy is available and most effective.
Can a buyer force a seller to complete a real estate sale?
In some cases, yes. Because real estate is considered unique, courts may order specific performance and require a seller to complete the sale if the buyer has satisfied all contractual obligations. Whether this remedy is available depends on the contract language, timing, and whether monetary damages would be inadequate.
What happens to earnest money in a real estate contract dispute?
Earnest money disputes often depend on whether a breach occurred and who was responsible. A buyer may be entitled to a refund if the seller breached the contract or a valid contingency was triggered. Conversely, a seller may be entitled to retain the earnest money if the buyer breached without legal justification.
Is a failure to disclose property defects considered a breach of contract?
It can be. Failing to disclose known defects may support claims for breach of contract, statutory violations, or misrepresentation, particularly in residential transactions. Whether nondisclosure rises to the level of a breach depends on the disclosure requirements, the seller's knowledge, and how the omission affected the transaction.
Our Real Estate Litigation page addresses additional questions about contract disputes and resolution options.
Ready to Talk to a Chicago Real Estate Litigation Attorney?
If a real estate contract dispute or disclosure issue is putting your transaction or property rights at risk, we can help you evaluate your options and next steps.
Contact us to discuss a practical strategy for resolving the issue and protecting your interests before the dispute escalates.
Schedule a Free ConsultationWhat to Expect During Your Consultation
During your free consultation, we'll discuss the nature of your dispute and where things currently stand. We'll evaluate your contract, the conduct of the parties, and whether you have a viable claim or defense - then help you determine the most practical path forward.