Is a purchaser's agreement to forfeit a deposit directly to the vendor if a land sale transaction does not complete?
British Columbia, Canada
The following excerpt is from Le Soleil Hospitality Inc. et al. v. Louie et al., 2007 BCSC 595 (CanLII):
Finally, in Hargreaves v. Spence (1983), 1983 CanLII 421 (BC SC), 45 B.C.L.R. 367 (BCSC), the court concluded that the combined effect of the vendor's acceptance of the purchaser's agreement to forfeit a deposit directly to the vendor if a land sale transaction did not complete, combined with the standard reference in the purchase agreement to the fact that a deposit would be forfeited as liquidated damages, should be construed as an agreement to accept the deposit as liquidated damages, and abandonment of any right to a claim for specific performance or damages arising from the breach.
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