Massachusetts SJC considers remedies for seller's breach of promise to sell

In K.G.M. Custom Homes, Inc. v. Prosky, 10 N.E.3d 117 (Mass. 2014), the Supreme Judicial Court of the Commonwealth of Massachusetts held that a buyer can choose to seek either specific performance or damages when a seller breaches the promise to sell. The issue was hard because Massachusetts allows only specific performance as a remedy for anticipatory breach and the complaint had alleged only anticipatory breach. Because the issue of actual breach was fully litigated and the court found the seller to have committed an actual breach, the judge was justified in giving the plaintiff a choice of remedies. Massachusetts law also provides that a liquidated damages clause does not prevent an aggrieved party from seeking specific performance of a real estate transaction. The court also affirmed the rule that every contract contains an "implied covenant of good faith and fair dealing." That covenant "exists so that the objectives of the contract may be realized."