Monday, January 6, 2014

Strouse v. Starbuck case brief

Strouse v. Starbuck case brief summary
987 S.W.2d 827 (1999)

CASE SYNOPSIS
Appellant seller sought review of a judgment of the Circuit Court of Webster County (Missouri) that was in favor of respondent buyers in an action for liquidated damages as a result of a breach of a real estate contract.

CASE FACTS
Respondent buyers contacted a real estate agent with regard to property owned by appellant seller. Subsequently, the parties entered into a real estate contract for the sale of the property. The contract contained a liquidated damages clause in the event the contract failed to close on the fault of respondents. After respondents failed to obtain financing, they notified appellant one week before closing that they were not going to be able to go forward with the contract. Appellant brought suit for liquidated damages.

PROCEDURAL HISTORY
The trial court entered judgment for respondents, and appellant sought review.

DISCUSSION

  • The court affirmed on the grounds that liquidated damages clauses were not enforceable unless a showing of actual harm was made. 
  • Appellant failed to make this showing so he was entitled to an award under the clause. 
  • Although appellant testified that he did not show the property after the contract with respondents was signed, the trial court was free to accept or reject this testimony. 
  • The trial court also had evidence before it that the property was not on the market before respondents approached appellant.

CONCLUSION
Judgment in favor of respondent buyers in an action for liquidated damages was affirmed because the liquidated damages clause in the real estate contract was unenforceable upon appellant seller's failure to prove actual harm.

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