Karimi v. 401 North Wabash Venture

Liquidated damages provision in condominium purchase agreement (with purchase price of $2.188 million), which allowed seller to retain an amount equal to earnest money deposit (which was 15% of purchase price) is an enforceable penalty. Seller sent buyers a letter terminating the contract after sale did not close by agreed extended date for closing, and seller sold the unit to a third party. Liquidated damages in amount of 15% of purchase price is a reasonable amount, considering the potential loss each party faced at time of contracting, and both parties agreed to accept the inherent risk that the set amount could exceed actual damages. (CUNNINGHAM and CONNORS, concurring.)