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Alternatively, the seller could declare the installment notes
due, tender title to the buyer, and foreclose under the laws of
the State of Utah. If the seller defaulted, the buyer's sole
remedy was to terminate and rescind the agreement, whereupon the
seller was to return all sums paid to the buyer, along with 6-
percent interest. Under those circumstances, the escrow agent
was required to record the quitclaim deed from the buyer to the
seller, leaving the buyer and seller with no further obligations
to each other.
We are unable to find the substance of the agreements
between the parties here to be options solely because of the size
of the downpayment in relationship to the agreed-upon purchase
price. The circumstances here are not equivalent to the parties'
having the option to walk away. The buyers (partnerships) would
be subject to a penalty if the first installment was not made.
That is so because the seller had the choice of accepting
liquidated damages ($10,000 downpayment plus $50,000 per unit) or
declaring the installment notes due and then foreclosing. In
that regard, the $60,000 damages approach 40 percent of the first
installment. Although the damages represent a smaller percentage
of the second installment, that installment must be converted to
a present value. Such conversion would cause the damages to be
relevant and proportionate to both installments.
One can argue that the sellers were able to walk away from
the bargained-for price. That argument, however, is wholly
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