The Kutzins (plaintiffs) entered into a contract to sell a house to the Pirnies (defendants) for $365,000. The Pirnies provided a down payment of $36,000. Later, they breached the contract and refused to go through with the sale. The contract contained no clause regarding liquidated damages or forfeiture of the deposit. The Kutzins eventually sold the house six months later. The Kutzins sued the Pirnies for damages resulting from the breach. The trial court entered judgment for the Kutzins and fixed the amount of damages at $17,325, which included factors such as the difference in between the original and actual selling prices, and utilities, taxes and insurance incurred during the period of time between the planned sale and the actual sale. The trial court ordered the Kutzins to return $18,675 to the Pirnies, representing the difference between the deposit paid and the actual damages sustained as a result of the breach. The Kutzins appealed, and the Appellate Division held that, because the amount of the damages was determined to be less than the deposit, the Kutzins were permitted to retain the entire deposit, but not more, as damages. The Pirnies appealed.