On April 10,Mel Entered into a Contract to Sell His

question 85

Essay

On April 10,Mel entered into a contract to sell his house to Nan at a price of $300 000.Title was to transfer May 31.Nan paid Mel a deposit of $20 000.A clause in the contract between them said: "If the buyer does not complete as specified,the seller can elect to keep the deposit as liquidated damages." On April 30,Nan told Mel she could not complete the contract because she could not sell her own house.Mel immediately entered into a contract to sell his house to Paul for $320 000.Nan insists that Mel return her deposit because he has suffered no damages.Will a court order Mel to return her deposit?

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Definitions:

Monopolistic Market

An economic scenario where only one seller provides a distinctive product or service, facing substantial obstacles that prevent other competitors from entering the market.

Purely Competitive Market

A market structure characterized by many buyers and sellers, free entry and exit, and products that are perfect substitutes.

Long Run

A period where all inputs or factors of production can be varied, allowing full adjustment to changes in the market or economy.

Short Run

A period in economics where at least one input is fixed and cannot be changed by the firm.