Contract – P&S agreement – Deposit – Liquidated damages

Where (1) a defendant failed to close on a real estate purchase and sale agreement, (2) the seller retained his deposit, sold the property to a third party for a lower price and then assigned its claim for the price differential to the plaintiff and (3) when the plaintiff sued, the defendant argued that the circumstances evinced the parties’ intent that the deposit would serve as liquidated damages, that argument was permissibly rejected in U.S. District Court based on contractual language making the liquidated damages provision optional.

Avery v. Hughes (Lawyers Weekly No. 01-297-11) (13 pages) (Selya, J.) (1st Circuit) Appealed from the U.S. District Court for the District of New Hampshire (Docket No. 10-2379) (Nov. 18, 2011).