Mueller v. Johnson

If an earnest money agreement allows the seller to recover "actual damages" upon the buyer's default, are those damages limited to the difference between the purchase price set forth in the agreement and the price for which the property later sold? We hold that they are not so limited.

R.G. and Patricia Johnson signed an earnest money agreement to buy Fred and Patricia Mueller's house. The Johnsons defaulted. Five months later, the Muellers sold the house for $3,500 less than the Johnsons agreed to pay.

The Johnson earnest money agreement gave the Muellers a choice between retaining the earnest…