I have a file now that is in litigation.  This is what happened:  Buyers were ready to close on the date agreed to by both the buyer and the seller, except the Hazard Insurance refuse to write the policy because of a pending Storm.  A big category 3 storm was about to hit.  The contract afforded an additional 10 days for delays such as this- lender related issues.  After the storm ( That was a Thursday-Friday  storm ) when Monday came they were suppose to proceed to closing. Everything was done Walk through report was all signed and finished. 

I asked my buyer to go to the house before proceeding to the settlement agent and see if the house has any damage from the weekend storm.  To his dismay...the house was flooded- wood floors were floating around carpets are soaked and needless to say there was a big damage from the storm.  The buyer happened to run in to the seller while at the house.  Seller then panicked and told the buyer- he will get everything replaced- the floors the carpets and other appliances that was damaged by the storm- I asume the sellers Hazard Insurance will pay for all the damages.  Seller says he will install a pump in the crawl space dry out the insulations etc.  buyer said ok-but I'll ask my wife what she think we should do. 

The next thing I got in the fax was an ammendment to the contract from the seller to extend the closing date for another 20 days until the house is repaired.  The buyer rejected the ammendment and wants out of the contract - he then forwards a release form and a rejection to the ammendment.

Now the seller sold the house for $185,000 $15,000 less than what we have offered.  We/the buyer got a summon to appear to court and pay the $15,000 claimed loss by the seller because he did not sign the ammendment and wanted a release.

Does the seller has the right to sue the buyer for performance while He ( seller ) was not ready to close due to damages in the house?  The Court date is coming March. 

Please give me your take on this.