Court Opinion

ID: 9752154
Source: CourtListenerOpinion
Date Created: 2023-08-28 17:39:45.823934+00
Date Added: 2024-06-11T07:27:08.490970
License: Public Domain

Dissenting Opinion by
Price, J.:
I respectfully dissent. It seems clear to me that the parties have provided by their contract that upon appellees’ breach the money paid on account is to be retained by the appellants to be applied on account of the purchase price, or as liquidated damages in compensation for damages and expenses appellants have incurred. I can read nothing further into the disputed clause in this regard, and accordingly this should be the limits of the right of the appellants to proceed for a breach of this contract.
Under this interpretation, appellants would have two options in pursuing a remedy against the defaulting appellees.
Option one would, of course, be the right to sue for the balance of the purchase price, which would be maintained as a suit in equity for specific performance. Heights Land Co. v. Swengel’s Estate, 319 Pa. 298, 179 A. 431 (1935). In such an action appellees would have to pay the balance, less $100, and appellants would then have to convey the property to the appellees. Obviously, appellants are unable to do this as they exercised their right to resell their property, for a smaller consideration, *320on December 6, 1973. Such an action is an election by appellants to abandon this option one under the contract terms with appellees.
Option two would be the appellants’ right, as exercised under this factual situation, to resell their property and proceed against appellees for damages. This appellants did by the pursuit of this action. And a reading of the disputed clause seems to make the intent of the parties obvious. The parties intended the amount paid, the $100, to be applied by the appellants as liquidated damages. The appellants, to my view, are therefore limited, by the contract, in the amount of their recovery to the money paid on account as liquidated damages.
It seems to me that the majority confuses these options by their statement:
“It seems to us equally clear that the seller is likewise suing for the enforcement of his contract rather than damages when he resells the property after default and then sues for the difference between the contract price and the price realized on the sale.” Majority opinion at p. 318.
Such a statement is not a concise or proper summary of the remedies available to appellants and blurs the distinction between specific performance, option one, and damages, option two.
Restatement of Contracts §339 (1932) has indeed been cited with approval by this Court, however, its interpretation has always been to void unreasonably large liquidated damages- as a penalty. This interpretation is buttressed by the Uniform Commercial Code — Sales, §2-718.1 Cases which I have been able to find support this view, including what I believe is an accurate statement of the law included in the opinion of President Judge Wilson of Union County:
“Therefore, if from the covenant and the contract *321viewed at the time of execution the amount fixed is an unreasonable forecast of just compensation for possible harm caused by a breach, and the possible harm is capable of accurate estimation, the covenant providing the plaintiffs with a fixed sum is not enforceable and does not affect damages recoverable by plaintiffs. Where the fixed amount is less than 10% of the total consideration, the courts have held the fixed amount is not unreasonable. This is particularly so in real estate transactions, because damages in the breach of a contract to sell land are extremely difficult tó ascertain. It is for this reason that clauses for liquidated damages are frequently inserted in contracts for the sale of land. Lichetti v. Conway, 44 Pa. Super 71; Tudesco v. Wilson, 163 Pa. Super 352, 60 A.2d 388; Kraft v. Michael, 166 Pa. Super 57, 70 A.2d 424; Laughlin v. Baltalden Inc., 191 Pa. Super 611, 159 A.2d 26. See also Martin Estate v. Freedman, 49 Dauphin 293; Welch v. Wilt, 68 Dauphin 116.”
The intent of these parties seems to be clear that it was intended that the amount paid be liquidated damages and as such appellants are limited in the amount of their recovery to the money paid on account as the valid and enforceable contract so provides.
I would affirm the order of the lower court sustaining appellees’ preliminary objections and dismissing appellants’ complaint.
Hoffman and Spaeth, JJ., join in this dissenting opinion.

. Act of Oct. 2, 1959, P.L. 1023, §2 (12A P.S. §2-718).