Charles Marsh Forfeiture Case Study

As a court judge, the forfeiture clause in the contract should not be enforced, and instead the contract should be treated like a mortgage, since a fair amount of the sale price has been paid off. The plaintiffs, Boris and Natasha, may believe that the land sale contract is clear and reasonable, considering the fact that Charles Marsh had signed and agreed upon the contract terms. The contract directly states the consequences of default in payments including the rights of forfeiting, while Charles Marsh’s default remains unquestionable. Charles Marsh claims that the plaintiff’s request of forfeiture is unfair and void because he had paid a substantial amount of the contract price. In short, forfeiture would not be considered the best approach …show more content…
He argues that the forfeiture would be unreasonable and unfair, since he had paid a substantial amount of the purchase price. Charles Marsh had made on-scheduled payments of a total of $16,000, which results to approximately forty-four percent of the purchase price being paid off. At the same time, the courts have “several approaches to save the vendee from forfeiture” (Nelson, 2015, p. 314). Likewise, the best and most fair approach is to terminate forfeiture when the buyer has paid a certain percentage of the purchase price (Professor Murray, lecture, October 26, 2016). The 2014 court case in Kentucky known as Watkins v. Eads demonstrates that although the buyer may have defaulted, the forfeiture may be void and unenforceable. The Eads filed a complaint against Watkins for defaulting payments under the terms of the contract, and claimed for full payment within the next ten days, or else the contract would be terminated. Watkins notified that forfeiture would not be an appropriate approach, and instead initiated that a foreclosure sale of the real property should be “legally mandated” (Nelson, 2015, p. 330). In other words, Watkins waived his rights to the foreclosure sale of the real property under the contract. The Kentucky Supreme Court held that forfeiture in an installment land sale contract upon a buyer’s default of payments is considered to be invalid and unenforceable (Nelson, 2015, p. 331). To emphasize, the court claimed that there is no practical distinguish between a land sale contract and a purchase money mortgage. All in all, Watkins v. Eads concluded that the best solution is to consider the installment land contract as a mortgage. The Kentucky case rules that forfeiture is considerable when the vendee has paid only a minimal amount of the contract price (Nelson, 2015, p. 332). Not