Supreme Judicial Court of Massachusetts
159 N.E. 530 (Mass. 1928)
In 1919, the plaintiff contracted to buy two parcels of land from the defendants with the purchase price payable in installments. The contract provided that if the plaintiff did not make payments promptly, the defendants had the option to void the contract, keeping all installment payments made up to their invocation of the option as liquidated damages. The plaintiff made his payments on time for the first three years after the contract was executed and, in consideration of the amount paid, the defendants conveyed one of the parcels of land in 1922. Thereafter, the plaintiff’s payments started to be made late and the plaintiff fell into default and way behind on his payments. For about four years, however, the defendants accepted these late payments without objecting to their tardiness. In November 1926, the plaintiff offered to make a payment as had been protocol for the previous four years. However, the defendants informed the plaintiff that they had exercised their option to void the contract on account of the late payments, effective August 1926. They also informed the plaintiff that they would be keeping all of his payments made to date as liquidated damages. Subsequently, the plaintiff offered to pay the full contract price, but the defendants declined to accept it. The plaintiff filed suit for specific performance of the contract. The trial court ruled in favor of the plaintiff. The defendants appealed.
Rule of Law
Holding and Reasoning (Rugg, C.J.)
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