Manny Fakhimi agreed to buy an apartment complex for $697,000 at an auction from

Question

Manny Fakhimi agreed to buy an apartment complex for $697,000 at an auction from David Mason. Fakhimi was obligated to put up 10 percent of the agreed-to price at the auction as a deposit. The agreement allowed Mason to keep this deposit should Fakhimi fail to come up with the remaining 90 percent of the auction price as liquidated damages for the default. Shortly after the auction, Fakhimi heard a rumor that the military base located near the apartment complex might be closing. Fakhimi immediately stopped payment on the check and defaulted on the agreement. Mason sued Fakhimi for the liquidated damages specified in the sales contract. Decide.

Explanation / Answer

Ans.

In this case Manny Fakhimi has failed to perform the contract of buying an apartment complex from David Mason for $697,000. As a result David Mason sued Manny Fakhimi for liquidated damages caused by the Breach party i.e by Fakhimi. Since due to rumor that is of military base located near apartment complex is closing , Fakhimi defaulted. As a result there are direct damages by breaching individual or party. These direct damages can be recovered by David Mason from Fakihimi on proof of causation of being default and the amount Fakhimi pays for tha damage, that is 10 percent of the agreed - to price at the auction as a deposit.Thus Mason has sued Fakhimi for the liquidated damages as specified in the sales contract , for being default on the aggrement.

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