Juan and Alicia contract with developer to purchase a condominium unit in a luxury high rise building currently under construction in Center City. They have selected a unit with scenic views of the city and many desirable features. The contract price is $1.75 million. The construction is scheduled to be completed within the next 12 months. The contract requires a $30,000 deposit with an additional $20,000 due in 90 days. The buyers will be credited with the deposit amounts at closing.

The contract includes the following two clauses:

Liquidated Damages. The parties here to agree that actual damages from a breach will be difficult to calculate, and they hereby agree that the contract deposit amount shall serve as they agreed to damages in the event of buyers default, and in such event said deposit shall be forfeited to seller

Time is of the essence: the parties here to agree that the timely performance of all terms and obligations under this contract is essential to the successful completion of the project, including the obligation of the developer to meet its financial commitment to its construction lender

When the parties signed the contract on September 1st, Juan and Alicia make a deposit of $30,000. When the date arrives for making the second deposit, the deliver a check for $20,000 to developers office. 10 days later when developer deposits a check it is returned for insufficient funds. Developer immediately declares Juan and Alicia to be in default on the contract and notifies them that it is keeping their initial deposit as liquidated damages, and demand payment of the additional $20,000 that they should have paid.

1. is developer entitled to the $30,000 initial deposit as liquidated damages?
2. Is developer entitled to the additional $20,000 as liquidated damages? As an alternative theory, what if developer sues Juan and Alicia to collect on the unpaid check?
3. Should it matter whether Juan and Alicia issued the check on insufficient funds by mistake (thinking that they had the funds in their account at the time) or they issued the check knowing that they did not have current funds in their checking account?
4. Assume Juan and Alicia have decided not to go through with the deal on day 60 because market values were dropping and they located a larger unit in a comparable nearby building for $300,000 less. They want to walk away from the deal and limit their loss under the contract, so they notified developer that they will not make second deposit and will not buy the property. At that point, with the contract language precludes developer from collecting the second deposit, from seeking actual damages, or from seeking specific performance?