Petersen (plaintiff) entered into a contract for the construction and purchase of a house to be built by Hubschman (defendant) on land owned by Hubschman. The parties later agreed to a reduction in the purchase price in exchange for labor and materials to be supplied by Petersen. Petersen made a down payment toward the purchase price. When construction of the house was essentially completed, Petersen identified several construction defects that Hubschman agreed to repair. Hubschman did not repair the defects to Petersen’s satisfaction. Hubschman refused to guarantee to repair the defects to Petersen’s satisfaction. Petersen refused to close the transaction and refused to pay the balance of the purchase price. Hubschman relied upon a forfeiture provision in the purchase contract to claim forfeiture of the down payment and the value of the labor and materials contributed by Petersen. Petersen sued Hubschman to recover the down payment and the value of his labor and materials. The trial court ruled in favor of Petersen. Hubschman appealed and the appellate court affirmed the trial court ruling. Hubschman petitioned the supreme court for review.