Question

Cohen contracts to sell his house and lot to Windsor for $100,000. The terms of the contract call for Windsor to pay 10 percent of the purchase price as a down payment. The terms further stipulate that if the buyer breaches the contract, Cohen will retain the deposit as liquidated damages. Windsor pays the deposit, but because her expected financing of the $90,000 balance falls through, she breaches the contract. Two weeks later, Cohen sells the house and lot to Ballard for $105,000. Windsor demands her $10,000 back, but Cohen refuses, claiming that Windsor’s breach and the contract terms entitle him to keep the deposit. Discuss who is correct.

Remember to use IRAC format to lay out the complete analysis.

Answer 1

ANSWER :-

Use IRAC Format to lay out the Complete anaysis are as follows:-

ISSUE:-

Issue is Cohen contracts to sell his house and lot to Windsor for $100,000. The terms of the contract call for Windsor to pay 10 percent of the purchase price as a down payment. The terms further stipulate that if the buyer breaches the contract, Cohen will retain the deposit as liquidated damages. Windsor pays the deposit, but because her expected financing of the $90,000 balance falls through, she breaches the contract. Two weeks later, Cohen sells the house and lot to Ballard for $105,000. Windsor demands her $10,000 back, but Cohen refuses, claiming that Windsor’s breach and the contract terms entitle him to keep the deposit.

so, isuue is who is correct.

RULE:-

A rule is for Liquidated damages and its provision in a contract states that Some dollar amount must be paid in the event of a future default or breach of contract.

ANALYSIS:-

Cohen contracts to sell his house and lot to Windsor for $100,000.The terms of the contract call for Windsor to pay 10 percent of thepurchase price as a deposit toward the purchase price, or a downpayment. The terms further stipulate that if the buyer breaches thecontract, Cohen will retain the liquidated damages. Windsor paysthe deposit, but because her expected financing of the $90,000 balance falls through, she breaches the contract.

CONCUSION :-

So Out of this Analysis, Cohen is correct.