Can sellers claim liquidated damages without proper termination notice? Thatcher v. Lang Explained

In Thatcher v. Lang, the Utah Court of Appeals addressed critical issues surrounding real estate contract defaults, termination procedures, and the availability of equitable remedies when express contracts govern the transaction.

Background and Facts

Michael Lang entered into a $1.8 million real estate purchase contract for approximately nineteen acres in Springdale, Utah. The contract included detailed default provisions: if the buyer defaulted, the seller could terminate the agreement by providing written notice specifying the breach, with a thirty-day cure period. After termination, all previous payments would be forfeited as liquidated damages. Lang struggled with timely interest payments, leading seller Melanie Thatcher to send a second default notice in July 2012 that generally referenced his being “in default and breach” without specifying particular breaches or cure amounts.

Key Legal Issues

The court examined four primary issues: whether Lang was entitled to specific performance, whether title should be quieted in Thatcher’s favor, whether Thatcher’s default notice was sufficient to trigger liquidated damages, and whether Lang could recover payments under unjust enrichment.

Court’s Analysis and Holding

The court denied specific performance because Lang had “tainted hands,” having stopped making interest payments before any alleged seller breach. On liquidated damages, the court held that the contract’s termination and liquidated damages sentences must be read together harmoniously. The liquidated damages provision was not self-executing but required proper termination notice. Thatcher’s second notice failed because it did not “specify” the breach as required by the contract’s plain language. Regarding unjust enrichment, the court reversed, holding that this equitable remedy is unavailable when an express contract governs the subject matter of the dispute.

Practice Implications

This decision emphasizes the critical importance of contract interpretation using plain language analysis and harmonizing all provisions. Practitioners must ensure default notices specifically identify each breach and cure amount rather than making general references to prior defaults. The ruling also reinforces that equitable remedies like unjust enrichment cannot circumvent express contractual provisions, even when those provisions prove difficult to enforce.