Can a buyer sue a seller for backing out of the purchase contract?
This would depend heavily on the specifics of the proposed purchase and contract and the local laws governing real property transactions, and probably cant be answered here.
Why did the seller back out? (Couldn't pay off the liens with the amount he or she was going to net, decided not to sell, got a better offer after the contract, had a title issue, etc)?
How is the possibility of not fulfilling addressed in the contract itself? Does it specify what happens if either party can't perform?
How far along did you get - do you have real expenses (such as having sold your home and are now homeless, paid for movers already, paid for legal work or mortgage costs, etc) that you incurred AFTER the seller should have known that he or she couldn't/wouldn't sell?
Once you have a clear outline of how things played out, consult a local real estate attorneyto see what you may or may not be able to accomplish and how much it might cost to bring a case. There may be cases when it would be worth it to go after a seller . . . but it may also be that even though you CAN sue, there is nothing to be gained. There may also be situations where the issue was one the seller couldnt predict (such as one seller passing away mid process and the property entering probate or estate, or a title cloud or flaw that cannot be easily rectified).
It is understandable to be frustrated when someone else drops the ball . . . so get a clear sense of what happened AND what you hope can be done to "fix" it (ie, what do you actually want to happen? buy the house? get paid back? just feel better about sticking it to the jerk who messed with your life, haha?) . . . and then consult a LOCAL attorney to see if that outcome is realistic.