Facts:Frances Morelli agreed to sell Judith Bucklin a house in Rhode Island for $177,000. The sale was supposed to be closed by September 1. The contract included a provision that "if Seller is unable to convey good, clear, insurable, and marketable title, Buyer shall have the option to:

(a) Accept such title as Seller is able to convey without reduction of the Purchase Price, or

(b) Cancel this Agreement and receive a return of all Deposits."

An examination of the public records revealed that the house did not have marketable title. Bucklin offered Morelli additional time to resolve the problem, and the closing did not occur as scheduled. Morelli decided that "the deal [was] over" and offered to return the deposit. Bucklin refused and, in mid- October, decided to exercise her option to accept the house without marketable title.

She notified Morelli, who did not respond.

She then filed a lawsuit against Morelli in a state court. (See Equitable Remedies.)

1. Discuss whether Morelli has breached the contract and will decide in whose favor the court should rule.
2. Assume that Morelli did breach the contract and determine what the appropriate remedy is in this situation.