American Landmark Corp. (American) (defendant) entered into a contract to purchase real estate from Highland Inns Corp. (Highland) (plaintiff). The contract stated that if American had not obtained a mortgage commitment in a certain amount by a set deadline, the contract would be void. The contract also required American to deposit $10,000 in escrow as earnest money, to be applied to the purchase price upon closing or paid to Highland as liquidated damages if American failed to fulfill its obligations under the contract. American was unable to obtain a mortgage commitment by the deadline, and Highland sued for the escrowed $10,000. The lower court awarded the $10,000 to Highland. American appealed.