10-2. Chris contracts to sell his house and lot to Kahra for$250,000. The terms of the contract call for Hayaa to pay 20percent of the purchase price as a deposit toward the purchaseprice, or as a down payment. The terms further stip¬ulate thatshould the buyer breach the contract, the deposit will be retainedby Chris as liquidated damages. Kahra pays the deposit, but becauseher expected financing of the $190,000 balance falls through, shebreaches the contract. After adjusting the listing price downwardseveral times due to market volatility, 10 months later Chris sellsthe house and lot to Connor for $270,000. Kahra demands her $50,000back, but Chris refuses, claiming that Kahra's breach and thecontract terms entitle him to keep the deposit. Discuss who iscorrect using the IRAC method of case analysis.
