In Zellner v. Tarnell , the Tarnells wanted to buy a home in Westchester County and gave the Zellners a downpayment.
When the sellers later sued the buyers for for failing to comply with the terms of the contract of sale, the Westchester County Supreme Court granted the Zellners' request to keep the monies which had been remitted, as "liquidated damages" for the breach.
On appeal, the Appellate Division, Second Department, thought that the parties' agreement only required the Tarnells to proceed with the deal if they got a binding mortgage commitment from a lender wtihin a thirty day period.
Since the commitment they received was revocable "at any time," the AD2 reversed and let the buyers out of the deal. (The appellate court was of the view the Tarnells hadn't procured a binding mortgage commitment within the governing timeframe and thus could withdraw from the purchase, scot free.)
See why people are afraid to commit?
To view a copy of the Appellate Division's decision, please use this link: Zellner v. Tarnell