Pablo contracts to sell his house and lot to Katie for $1 Million Dollars. The terms of the contract call for Katie to make a deposit of 10 percent of the purchase prices as a down payment. The terms further stipulate that should the buyer breach the contract, Pablo will retain the deposit as liquidated damages. Katie makes the deposit, but because he expected financing of $900,000 balance falls through, she breaches the contract. A few weeks later, Palbo sells the house and lot to Maria for $1,050,000. Katie demands her $100K back, but Pablo refuses, citing that Katie's breach and the contract terms entitle him to keep the deposit. Discuss who is correct.

Can you please be detailed and mentioned the laws applicable?