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Posted by: Tanja Trezise on May 31, 2013

Court: TN Court of Appeals

Attorneys 1:

Angello Lin Huong, Lebanon, Tennessee, for the appellant, Jalal Bachour.

Attorneys 2:

Jay Jackson, Murfreesboro, Tennessee; Johnathon Clyde Hershman, Woodbury, Tennessee, for the appellees, Devin Mason, Craig Mears and Mason & Mears Properties.

Judge(s): COTTRELL

This case arose from two contracts between the same parties for the sale of commercial property. A provision in the second contract that was not included in the first provided that the buyer would retain $75,000 of the contract price if an access road to the property was not completed by a certain date. Completion was defined as occurring “upon the dedication and turning the streets over to the town of Woodbury and/or Cannon County, Tennessee.” The buyer subsequently filed a petition for declaratory judgment, asking the court to find that completion had not occurred and that he was therefore entitled to keep the $75,000. The trial court ruled against the buyer, holding that he was obligated to pay the full contract price to the sellers. We affirm the result reached by the trial court because we find that the $75,000 clause was not a valid liquidated clause provision, but rather a penalty.