Opinion ID: 1414276
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Heading: South Carolina Law

Text: Basic contract law provides that when a contract is clear and unambiguous, the language alone determines the contract's force and effect. C.A.N. Enterprises, Inc. v. South Carolina Health & Human Servs. Fin. Comm'n, 296 S.C. 373, 373 S.E.2d 584 (1988). It is not the function of the court to rewrite contracts for parties. See Gambrell v. Travelers Ins. Cos., 280 S.C. 69, 310 S.E.2d 814 (1983). Parties to a contract may stipulate as to the amount of liquidated damages owed in the event of nonperformance. Tate v. Le Master, 231 S.C. 429, 99 S.E.2d 39 (1957). Where, however, the sum stipulated is plainly disproportionate to any probable damage resulting from breach of contract, the stipulation is an unenforceable penalty. Id.; Kirkland Distributing Co. of Columbia, S.C. v. United States, 276 F.2d 138 (4th Cir.1960). Equity will not enforce a penalty for breach of contract. South Carolina Dep't of Health and Envtl. Control v. Kennedy, 289 S.C. 73, 344 S.E.2d 859 (Ct.App.1986). Equity does not favor forfeitures or penalties and will relieve against them when practicable in the interest of justice. Lane v. New York Life Ins. Co., 147 S.C. 333, 374, 145 S.E. 196, 209 (1928) citing Bangert v. John L. Roper Lumber Co., 169 N.C. 628, 86 S.E. 516, 517 (1915). The above-stated principles of contract law are consistent with the conclusion that a provision in an installment land contract declaring forfeiture in the event of purchaser default can, in particular circumstances, constitute a penalty. In those circumstances, as in other contractual instances where a stipulated sum amounts to a penalty, we conclude it would be inequitable to enforce the forfeiture provision without first allowing the purchaser an opportunity to redeem the installment contract by paying the entire purchase price. Our conclusion is supported by authority from other jurisdictions. In numerous other states, courts claim an equitable power to deny or delay forfeiture when fairness demands. Freyfogle, supra 620; see Hatfield v. Mixon Realty Co., 269 Ark. 803, 601 S.W.2d 894 (Ct.App.1980); Cedar Lane Investments v. American Roofing Supply of Colorado Springs, Inc., 919 P.2d 879 (Colo.Ct.App.1996); Ellis v. Butterfield, supra ; Nelson v. Robinson, 184 Kan. 340, 336 P.2d 415 (1959); Perkins v. Penney, 387 A.2d 205 (Me.1978); Rothenberg v. Follman, 19 Mich.App. 383, 172 N.W.2d 845 (1969); O'Meara v. Olson, 414 N.W.2d 563 (Minn.Ct.App.1987); Beck v. Strong, 572 S.W.2d 484 (Mo.Ct.App.1978); Sharp v. Holthusen, 189 Mont. 469, 616 P.2d 374 (1980); Martinez v. Martinez, 101 N.M. 88, 678 P.2d 1163 (1984); Lamberth v. McDaniel, 131 N.C.App. 319, 506 S.E.2d 295 (1998); Straub v. Lessman, 403 N.W.2d 5 (N.D.1987); T-Anchor Corp. v. Travarillo Assocs., 529 S.W.2d 622 (Tex.Civ.App.1975); Call v. Timber Lakes Corp., 567 P.2d 1108 (Utah 1977); Bailey v. Savage, 160 W.Va. 523, 236 S.E.2d 203 (1977); see also 4 Richard R. Powell, REAL PROPERTY § 37.21[1][c] at 132 (2001) ([t]he main problem with the forfeiture remedy is that it often puts the seller in too favorable a position and, therefore, is subject to attacks based on equitable considerations of unfairness and unconscionability.). In fact, the authoritative treatise on real property law provides, no state today is likely to condone a purchaser forfeiture that greatly exceeds the vendor's loss. 15 Powell, REAL PROPERTY § 84D.01[4] at 12. As discussed at length in Bartles v. Livingston, 282 S.C. 448, 319 S.E.2d 707 (Ct.App.1984), the common law recognized an equitable right of redemption in the context of mortgages well before any statutory right was granted. The mortgagor was given an equitable right to redeem the property irrespective of the terms of the mortgage and this right to redeem was considered an equitable interest in the land. For years, in an executory contract for the sale of land our Court has equated the vendor with the mortgagee and the vendee with the mortgagor. Dempsey v. Huskey, 224 S.C. 536, 80 S.E.2d 119 (1954). [4] There is no equitable reason why the right of redemption should not likewise be afforded to vendees in an installment land contract in appropriate circumstances. For the above reasons, we hold courts of equity can relieve a defaulting purchaser from the strict forfeiture provision in an installment land contract and provide the opportunity for redemption when equity so demands. [5] Accordingly, this matter is remanded to the master-in-equity to determine whether Purchaser has an equitable right of redemption. The decision of the Court of Appeals is AFFIRMED AS MODIFIED. TOAL, C.J., MOORE, PLEICONES, JJ., and Acting Justice George T. Gregory, Jr., concurs.