Boots, Inc. v. Prempal Singh

OPINION BY Senior Justice HARRY L. CARRICO.

This is an appeal in an interpleader action involving a provision in a real estate contract that makes a cash deposit non-refundable in certain circumstances. The question presented is whether the provision is a valid liquidated damages clause or an impermissible penalty or forfeiture. The circuit court construed the provision as a penalty or forfeiture and ordered the deposit refunded. Finding the circuit court erred, we will reverse its judgment.

The evidence shows that on September 3, 2003, Boots, Inc. (Boots), the owner of Denny's Restaurant in…