Watson v. Ingram

Petitioner, a buyer under a residential real estate purchase and sale agreement, seeks to recover $15,000 in earnest money he paid into escrow. At issue is whether the earnest money agreement is enforceable as liquidated damages. More specifically, this case involves the test used to determine the enforceability of liquidated damages provisions in real estate purchase and sale agreements. The trial court enforced the agreement, finding it was a reasonable estimate of anticipated harm as of the date of contract formation. The Court of Appeals affirmed, likewise evaluating the provision as of…