Lichetti v. Conway

Citations

• 44 Pa. Super. 71
• 1910 Pa. Super. LEXIS 128

Syllabus

<p>Vendor and vendee — Liquidated damages — Penalty—Hand money— Articles of agreement.</p> <p>1. Where articles of agreement for the sale of real estate provide that the price should be $33,000, and that $500 shall be paid on the signing of the agreement, and also stipulates “if purchaser fails to complete purchase the $500 paid on account is to be kept by sellers to liquidate damages,” and the purchaser after paying the $500 fails to complete the purchase, the sellers may retain as their own the $500, although they may have subsequently sold the property to another person for exactly the same price.</p> <p>2. Whether a sum mentioned in articles of agreement for the sale of land to be retained by the sellers in case of a breach of the contract by the purchaser, is 'to be treated as a penalty or as liquidated damages, is a question of law to be decided by the court upon consideration of the entire contract, in the light of the circumstances under which the parties dealt. The fact that the sum paid at the signing of the agreement is greatly disportionate to the entire purchase money is a circumstance tending to show that such sum was intended as liquidated damages and not as a penalty.</p>