Pablo contracts to sell his house and lot to Katie for $1 Million Dollars. The terms of the contract call for Katie to make deposit of 10 percent of the purchase prices as a down payment. The terms further stipulate that should the buyer breach the contract, Pablo will retain the deposit as liquidated damages. Katie makes the deposit, but because she expected financing of $900,000 balance falls through, she breaches the contract. A few weeks later, Pablo sells the house and lot to Maria for $1,050,000. Katie demands her $100K back, but Pablo refuses, citing that Katie's breach and the contract terms entitle him to keep the deposit. Discuss who is correct.

Question

Business

Gauge Cox

22 February, 06:26

Pablo contracts to sell his house and lot to Katie for $1 Million Dollars. The terms of the contract call for Katie to make deposit of 10 percent of the purchase prices as a down payment. The terms further stipulate that should the buyer breach the contract, Pablo will retain the deposit as liquidated damages. Katie makes the deposit, but because she expected financing of $900,000 balance falls through, she breaches the contract. A few weeks later, Pablo sells the house and lot to Maria for $1,050,000. Katie demands her $100K back, but Pablo refuses, citing that Katie's breach and the contract terms entitle him to keep the deposit. Discuss who is correct.

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Answers (1)

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Aracely Liu · Answer 1

The person that is correct is Pablo, because when it falls under liquidation damage

Explanation:

Solution

Pablo is very right when it comes under the liquidation damage

Liquidated damages: Refers to when the contract is broken then the seller in this case can have the money given that the harm suffered is reasonable. Because, this is agreed on by both the members so it comes under the wat is called litigation.

So the applicable law in this case is liquidation damage