Cohnen contracts to sell his house and lot to Windsor for $100.000.00. The terms of the contract call for Winsdor to pay 10 percent of the purchase price as a deposit toward the purchase price, or a down payment. The terms further stipulate that should the buyer breach the contract, the deposit will be retained by Cohen as liquidated damages. Windsor pays the deposit, but because her expected financing of the $90,000.00 balance falls through, she breaches the contract. Two weeks later Cohen sells the house and lot to Ballard for $105,000.00. Windsor demands her $10,000.00 back, but Cohen refuses claiming that Windsor's breach and the contract terms entitle him to keep the deposit.

Who would be correct in this situation and why? What laws make this true?