JackWallstonwanted to make an offer to purchase a house from Lionel Ingram. The purchase price for the house was $355,000. In the contract for the purchase of the house was a clause that stated, "Buyer shall pay a nonrefundable $15,000 earnest money deposit. In the event of default by the Buyer, earnest money shall be forfeited to Seller as liquidated damages, unless Seller elects to seek actual damages or specific performance." Additionally, the contract contained another clause that stated, "Buyer represents that buyer has sufficient funds to close this sale in accordance with the agreement and is not relying on any contingent source of funds unless otherwise set forth in this agreement."Wallstonwent to the bank to secure financing. The bank offered financing, but also added thatWallstonhad to secure $100,000 of his own money for closing. Not happy,Wallstonsought financing elsewhere. The contract initially had a closing of September 15, butWallstonrequested that it be extended to October 1. Ingram refused. He also realized thatWallstondid not have adequate money to secure financing. He placed the house back on the market. Ingram received an offer on September 25.Wallstonwas still having problems with his financing. He contacted Ingram to let him know that he was still trying to get financing for the house. He needed additional time. Ingram notifiedWallstonthat he had found another buyer and that he was going to institute an action for the earnest money deposit. BecauseWallstondid not secure financing, Ingram believed he was entitled to the earnest money deposit. Your attorney asks you to answer the following questions:

a. Were the liquidated damages enforceable? Why or why not?

b. Are there any viable defenses thatWallstoncould raise against Ingram? Why or why not?

You answer should explain the requirements for valid liquidated damages clauses and should discuss whetherthere are any viable defenses or not and why.