Colonial at Lynnfield, Inc. v. Sloan

Colonial (plaintiff) agreed to sell a 49 percent Hilton Inn interest to Colonial Associates (Associates) (defendant) for $3,375,000, with a $200,000 liquidated-damages clause for buyer default; when Associates could not secure financing and Colonial refused to extend the closing date, Colonial declared Associates in breach and later sold a 50 percent interest to a different buyer, Lincoln, for $3.7 million, with a contingent right to instead sell only a 49 percent interest for $3,626,000 if needed. Colonial sued to enforce the full $200,000 liquidated-damages clause, and the district court ruled for Colonial; Associates appealed.