Thursday, February 6, 2020

Case Study Example | Topics and Well Written Essays - 500 words - 17

Case Study Example After a period of two weeks, Carnack sold the house and lot to Balkan at a cost of $105,000. Willard wanted Carnack to refund him the deposit that he made to him, but Carnack said that Willard breached the contract, and the deposit was entitled to him as required by the contract. According to the law, in an event that the contract is breached, regardless of the form that it takes, the innocent party is always entitled to take a step for the damages. In the case study, the innocent party is Carnack, and by law he is within his legal right to terminate the contract that he made with Willard and retain the deposit as liquidated damages as noted by Koffman & McDonald (2007). The contract that Willard and Carnack entered had a provision for liquidated damages clause in it. That provision made it clear that should Willard breach the agreement that he signed with Carnack, then the 10% deposit would be considered as liquidated damages. According to Burling (2011) that clause, therefore, made it clear that Carnack was entitled to the deposit after Willard breached the contract. Generally in most cases, the court always maintains that the clause with the liquidated damages has to be adhered to. The clause has to be respected even if it implies that the affected individual gets less than his or her real damages resulting from the breach. Therefore, Carnack is right in taking the 10% deposit made to him by Willard as part of the down payment since Willard breached the contract. According to Wilmott et al. (2009), it can be argued that Carnack terminated the contract that he had with Willard based on the following principles of the law. First Willard committed an anticipatory breach. Anticipatory breach is a situation where the buyer states in the form of writing that s/he will not honor the agreement or will do it on terms that were not initially agreed upon. In the case of

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