Seller v. Buyer: Forfeiture of Deposit as Penalty

The dispute arose from a contract for the sale of property where the buyer, having paid a deposit, later sought to withdraw, prompting the seller to claim forfeiture of the deposit pursuant to the terms of the agreement. The court ruled in favor of the buyer, finding that the contractual clause allowing the seller to retain the deposit upon the buyer's withdrawal was, in effect, a penalty clause, and the trial court was therefore justified, pursuant to existing statutory provisions, in mitigating the amount of this penalty despite the buyer's unilateral breach, as equity allowed for the adjustment of such punitive financial stipulations.