John F. Kealy and Robert M. Snell, Doing Business as Partners Under the Partnership Name of Mid-Plains Development Company v. Roger L. Harter

This case involves a determination of whether a provision in a contract for the sale of land provides for liquidated damages or creates an illegal penalty. The district court found that the provision created a penalty and refused to enforce it. John Kealy and Robert Snell appeal, arguing the district court misconstrued Nebraska law as well as one of the stipulated facts.

Kealy and Snell brought an action in federal district court to enforce two promissory notes executed by Roger Harter in the amount of $15,000 and $50,000. The parties stipulated to the following facts. Kealy and Snell are…