A "family" is not an entity that is capable of entering into a contract, so who exactly is party to the contract?

Asked whom?  What does "termination policy" mean?

When a buyer breaches a contract to buy real property, the seller's remedy is to put the property back on the market.  If the property sells for less than the previously contracted price, then the breaching buyer will be liable for the difference, together with all costs incurred by the seller in relisting the property.  If the property sells for more, then the seller has no damages (other than, possibly, costs of relisting).  And, as mentioned, attorneys' fees will likely also be included.

No.

Disagree.  Specific performance (an equitable remedy) would not be available in a situation such as this because the seller would have an adequate remedy at law.