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Property Law Keyed to Singer
Stonebraker v. Zinn
Facts
Richard and Mildred Zinn (Defendants) agreed to sell a house to Samuel and Diana Stonebraker (Plaintiffs). A deed of trust lien was given previously to a bank, which Defendants acknowledged to Plaintiffs. Upon full payment by Plaintiffs, Defendants had to convey marketable title to the property by deed. Defendants agreed to make payments on the note secured by the deed of trust. The contract provided for liquidated damages in the event Plaintiffs abandoned the property, and the amount was the amount Plaintiffs had paid on the purchase price at the time of abandonment. One year after moving in, Plaintiffs notified Defendants that they could not afford both the costs associated with the house, and vacated the property. Plaintiffs claim that the forfeiture clause is a penalty because the damages are grossly disproportional to actual damages, and so should be unenforceable.
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