John Kuhn and Marlene Kuhn (plaintiffs) agreed to purchase a home in New Jersey from Spatial Design, Inc. (Spatial) (defendant) for $515,000. The Kuhns paid a $50,000 deposit. After failing to get a mortgage, the Kuhns decided not to go through with the purchase, and they sought to cancel the real estate contract. Spatial refused to return the Kuhns’ deposit and eventually sold the house to other purchasers for $434,000. The Kuhns sued Spatial for the return of their deposit, relying on the mortgage contingency in their real estate contract. Spatial counterclaimed, arguing that the Kuhns falsified their financial situation in their mortgage application and were in breach of contract. The trial court agreed with Spatial and ordered the Kuhns to pay Spatial almost $100,000 in damages, less the retained deposit. The Kuhns appealed.