Carnack contracts to sell his house and lot to Willard for $100,000. The terms o

Question

Carnack contracts to sell his house and lot to Willard for $100,000. The terms of the contract call for Willard to pay 10% of the purchase price as a deposit toward the purchase price, or as a down payment. The terms further stipulate that should the buyer breach the contract, Carnack will retain the deposit as liquidated damages. Willard pays the deposit, but because her expected financing of the $90,000 balance falls through, she breaches the contract. Two weeks later, Carnack sells the house and lot to Balkova for $105,000. Willard demands her $10,000 back, but Carnack refuses, claiming that Willard

Explanation / Answer

Carnack is correct and gets to keep the deposit. The case study says directly, "The terms further stipulate that should the buyer breach the contract, Carnack will retain the deposit as liquidated damages." This uses the term 'breach.' Then it says, "she breaches the contract." Therefore, the contract is breached and the terms should be followed - which include Carnack keeping the deposit which was paid. **This is assuming that there are not other stipulations within the contract which are not told here.

Related Questions

Navigate

• Browse (All)
• Browse C
• Subjects

---