Facts:
The Seller brought an action against the Buyer. The allegations were about a contract of sale of a real estate. The seller’s action sought to recover the price of $45,000 plus the interests; as well as to recover their lawyer’s fees upon a promissory note referred in the contract. The buyer’s appeal was founded on the basis that the trial judged erred in granting summary judgment in favor of the seller and denying a summary judgment and a counterclaim from the buyer.
Issue Statement:
Whether seller defaulted on their obligation to supply the marketable title and thus was in breach of the contract? And whether the contract provisions that the seller and the court relied on to grant the motion for summary judgment was to be regarded as a penalty provision and therefore void under Georgia law? Whether the trial judge erred in his judgment?
Rule of Law or Legal Principle Applied:
Code Ann: § 20-1402 & §§ 20-1403 provides: “Damages are given as compensation for the injury sustained. If the parties agree in their contract what the damages for a breach shall be, they are said to be liquidated, and unless the agreement violates some principle of law, the parties are bound thereby”. In addition to the above factors is that both parties are bound by their agreement. Code Ann: §§ 378: To bar specific performance there should be explicit language in the liquidated damages provision that it is to be the sole remedy.
Application:
While a right of recovery was still pending, the judge erred in granting summary of judgment. The order of Certiorari was granted as the court considered a real estate sales contract as one that allows payment of earnest money. The court held that this was a provision of liquidated damages. The Court of Appeals held that such a provision in a contract of sale was a penalty and could not be enforced under Georgia laws. The court