In the above scenario, Willard is correct and should be refunded back his monies. A breach of contract occurs in a situation whereby one party to the contract does not fulfill his/her promise or obligation as stipulated in a contract. For a breach of contract to be valid, the plaintiff must proof beyond reasonable doubt that presence of a valid contract, terms, and condition that affirms a breach of contract and the damages thereof. This contract is to considerable extent rescission. Rescission is a situation whereby the contract is canceled, and the parties to a contract are restated to their initial position ( Miller & Jentz, 2006).
In the above case scenario, liquidated damages are the condition in a contract affirms that a specific amount is to be compensated in case of a future evasion or breach of contract ( Miller & Jentz, 2006). It is important to note that liquidated damages vary from penalties. A penalty set a particular amount of money that should be compensated in case of a breach of contract, and its major aim is to punish the party that breaches the contract. It is worth noting that liquidated damages requirements are enforceable in the court of law. However, in case the court of law finds the condition demands a penalty, the contract as to the sum will not be enforceable, and more so, the recovery will be restricted to the real damages in this condition ( Miller & Jentz, 2006). To ascertain whether a specific requirement is for liquidated damages or penalty, the court has to find out whether, during the contract creation, it would be hard to estimate the number of damages in case of a breach. The next issue that the court must find out whether the amount of compensation set as damages was reasonable and not excessive ( Miller & Jentz, 2006).
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In the above scenario, although Willard breached the initial contract by not paying the remaining $90,000, Carnack did not lose anything but instead gained $ 5,000 after selling the house to Balkova. Therefore, the contract in the above condition would be restitution.
References
Miller, R. L., & Jentz, G. A. (2006). Fundamentals of Business Law Summarized Cases (with Online Legal Research Guide).
