Merritt Hill Vineyards, Inc. v. Windy Heights Vineyard, Inc.
Court of Appeals of New York
460 N.E.2d 1077 (1984)
Merritt Hill Vineyards (plaintiff) agreed to buy a majority stock interest in Windy Heights Vineyard (defendant), with a contract clause allowing Windy Heights to keep Merritt Hill's $15,000 deposit as liquidated damages if the sale didn't close — but only if Windy Heights had obtained title insurance and provided mortgage confirmation by closing, under a section labeled "Conditions Precedent to Purchaser's Obligation to Close." At closing, Windy Heights had done neither. Merritt Hill refused to close and demanded its deposit back plus $26,000 in consequential damages when Windy Heights refused to return it.
Whether a party to a land-purchase contract is entitled to the return of its deposit when the other party fails to fulfill a condition precedent to closing.