Park Valley Corp. v. Bagley (1981)

Park Valley Corp. v. Bagley, 635 P.2d 65 (Utah 1981)

Legal information, not legal advice. Verify against the cited opinion.

• Citation: 635 P.2d 65 (Utah 1981)
• Court / Year: Utah Supreme Court, 1981
• Topic tags: forfeiture · liquidated_damages · loss_of_bargain
• Facts: The buyer (Park Valley Corp.) made a down payment and the first installment, then stopped paying and repudiated, telling the sellers it would not perform further. The sellers served a notice of delinquency (Dec. 13, 1978) demanding the contract be brought current; when no payment came, they served a notice of forfeiture (Jan. 3, 1979). The contract provided that all payments made “shall be forfeited to the seller as liquidated damages for the non- performance of the contract.” The seller’s loss of bargain was $145,000.
• Holding: Where the seller’s loss of bargain plus other undisputed damages exceeds the total amount the buyer paid, the forfeiture-as-liquidated-damages provision is enforceable, and the seller may retain all payments. The trial court erred in refusing to enforce the forfeiture; reversed and remanded with instructions to enter judgment for the sellers.
• Reasoning: Applying the same liquidated-damages/penalty framework as perkins-v-spencer-1952, the Court reached the opposite result on the numbers: because the forfeited payments were less than the seller’s actual loss, the forfeiture bore a reasonable relationship to damages and was not an unenforceable penalty. The penalty doctrine cuts both ways — it protects a high-equity buyer but enforces forfeiture against a low-equity, repudiating buyer.
• Practical impact for CFD operators/buyers: The mirror image of Perkins. Forfeiture is fully enforceable in Utah when the buyer has little equity and the seller’s loss (especially loss of bargain from a fallen market or repudiation) swamps the payments made. Confirms Utah’s hybrid regime: outcome-determinative fact is the ratio of forfeited payments to the seller’s actual loss.
• Good-law status: Good law.
• Source (retrieved): https://www.courtlistener.com/opinion/1188559/park-valley-corp-v-bagley/ · Verified: 2026-06-08

Jurisdictions that follow / cite: utah

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Disclaimer. Legal information, not legal advice. Confirm the opinion is still good law before relying on it.