Juan contracts to sell his house and lot to Isabella for $100,000. The terms of the contract call for Isabella to pay 10 percent of the purchase price as a down payment. The terms further stipulate that if the buyer breaches the contract, Juan will retain the deposit as liquidated damages. Isabella pays the deposit, but because her expected financing of the $90,000 balance falls through, she breaches the contract. Two weeks later, Juan sells the house and lot to Ballard for $105,000. Isabella demands her $10,000 back, but Juan refuses, claiming that Isabella's breach and the contract terms entitle him to keep the deposit. Who is correct?

a.

Juan because damages for the buyer's breach of contract are difficult to determine. The housing market might have substantially changed by the time Juan re-lists the house for sale.

b.

Juan because 10% if reasonable and not punitive.

c.

Isabella because Juan sold the house for more money than Isabella had been willing to pay.

d.

Both A and B.