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Mrs. Betts contracted to buy Jones commercial property for $1,265,000. Under the terms of the written contract, Mrs. Betts paid $126,000 as an earnest-money deposit,
Mrs. Betts contracted to buy Jones’ commercial property for $1,265,000. Under the terms of the written contract, Mrs. Betts paid $126,000 as an earnest-money deposit, which would be retained by the seller as liquidated damages if she failed to close by the deadline. Mrs. Betts’ husband died four days before the closing deadline, and she was not able to close by the deadline because she was relying on her husband’s business to assist her in obtaining the necessary financing to complete the purchase. After the death, she was not able to obtain the financing she was depending on. Jones kept the $126,000. Now Mrs. Betts is suing for the earnest-money deposit back arguing that the purpose of the contract was frustrated due to the untimely death of her husband. Is this a good argument? Why or why not?
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