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Before buying a house, Dean and Donna Testa hired Ground Systems, Inc. (GSI), to inspect and describe the sewage and water disposal system. GSI reported that a split sewage and water disposal system was in place with a watertight septic tank, a wastewater tank, a distribution box, and a leach field. The Testas bought the house. Later, Dean Testa noticed that the system was not as GSI described; there was no distribution box or leach field. Furthermore, there was only one tank, and the tank was not watertight. The Testas arranged for the installation of a new system and sold the house. Assuming that GSI is liable for a breach of contract, what is the measure of damages?

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Answer:

Dean and Donna can sue GSI because they breached their contract since GSI   did not provide the information for which they were contracted for.

The report given by GSI probably made Dean and Donna overpay for the house. Since Dean and Donna suffered a financial loss, they can sue GSI for compensatory damages. The compensatory damages would be the difference in value of the house if it had the septic system described by GSI and the house without that system.

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