Sale Contract Cancelled under false pretenses.

Generally, the answer is yes.  However, there are still a lot of outstanding variables for a blanket answer.  From your statements, I'm assuming this was a sales contract for residential real estate.  The standard contract should spell out the if/when of cancellation (which you state this didn't fall into an acceptable contingency to cancel) as well as the remedy if a party breaches.  If it is silent, you may have many remedies available (and some damages may be overlooked if you're not careful).  Sounds to me like you're at a point where a consultation with an attorney (particularly one versed in real estate litigation) would be to your benefit.  In my experience, these are situations where you don't want to sit around and wait, you should get legal consulation sooner rather than later.