Kaiman Realty, Inc. v. Carmichael, 65 Haw. 637, 655 P.2d 872 (Haw. 1982)
Legal information, not legal advice. Verify against the cited opinion.
- Citation: 65 Haw. 637, 655 P.2d 872 (1982); 1982 Haw. LEXIS 254. (A related later proceeding is reported at 66 Haw. 103, 659 P.2d 63 (1983).)
- Court / Year: Supreme Court of Hawaii, 1982.
- Topic tags: forfeiture · liquidated_damages · agreement_of_sale
- Facts: A real-estate sale dispute in which the seller sought to retain the buyer’s payments/deposit on the buyer’s default under a contract containing a liquidated-damages/forfeiture provision.
- Holding: The Hawaii Supreme Court applied and confirmed the rule that a seller may retain a defaulting buyer’s payments as liquidated damages only where the amount bears a reasonable relationship to the seller’s actual damages (absent the buyer’s bad faith); a retention functioning as a penalty is not enforceable. The case is part of the controlling Hawaii line treating forfeiture under installment/agreement-of-sale and purchase contracts as subject to equitable and reasonable-relationship limits.
- Reasoning: The court followed jenkins-v-wise-1978 and gomez-v-pagaduan-1980, reaffirming that Hawaii does not permit unqualified forfeiture of a buyer’s payments and that the burden rests on the party enforcing the clause to show the retained amount reasonably approximates actual loss.
- Practical impact for CFD operators/buyers: Kaiman is the Supreme Court capstone confirming the Gomez reasonable-relationship test at the highest Hawaii court. For operators it underscores that a forfeiture/liquidated-damages clause in a Hawaii agreement of sale is enforceable only to the extent it tracks actual damages (good-faith default); for buyers it confirms a right to recover any retained amount that is a penalty rather than a reasonable estimate of the seller’s loss.
- Good-law status: Good law; part of the still-followed Hawaii forfeiture / liquidated-damages line (cited alongside Dias, 67 Haw. 114, 679 P.2d 133, and Scotella v. Osgood, 4 Haw. App. 20, 659 P.2d 73 (1983)).
- Source (retrieved): https://www.courtlistener.com/opinion/1177742/kaiman-realty-inc-v-carmichael/ · Verified: 2026-06-08 (citation [65 Haw. 637; 655 P.2d 872], court, and 1982-12-29 decision date confirmed via CourtListener opinion index; place in the forfeiture/liquidated-damages line corroborated by Iwamoto, Liquidated Damages in Hawaii Real Estate Purchase and Sale Agreements, The Practical Real Estate Lawyer (Sept. 2019), https://www.honolulu-lawyers.com/static/2023/10/prel1909_iwamoto.pdf).
Jurisdictions that follow / cite: hawaii
Disclaimer. Legal information, not legal advice. Confirm the opinion is still good law before relying on it.