Randall v. Riel, 123 N.H. 757, 465 A.2d 505 (N.H. 1983)
Legal information, not legal advice. Verify against the cited opinion.
- Citation: 123 N.H. 757, 465 A.2d 505 (1983) (decided Aug. 31, 1983).
- Court / Year: Supreme Court of New Hampshire, 1983.
- Topic tags: forfeiture · equitable_interest · liquidated_damages · restitution
- Facts: On November 28, 1980, Glenn and Sharon Randall (buyers/vendees) signed an agreement with the Riels (sellers/vendors) that the parties called a “bond for deed,” to purchase land and buildings in Barnstead, New Hampshire, for $49,900. The instrument was a classic installment land contract: the vendees took possession and paid in installments while the vendors retained legal title until final payment. The vendees defaulted, and the trial court (master) strictly enforced the contract’s forfeiture clause, letting the vendors keep the property and all sums already paid.
- Holding: Reversed and remanded. The New Hampshire Supreme Court held that the terms “contract for deed,” “bond for deed,” and “installment land contract” are synonymous and describe “the most commonly employed mortgage substitute,” and that a contract forfeiture clause cannot be automatically enforced. A provision for retention of a stipulated sum on breach is enforceable as liquidated damages — rather than struck as an unenforceable penalty — only when three conditions coexist: (1) the damages anticipated from the breach are uncertain in amount or difficult to prove; (2) the parties intended to liquidate damages in advance; and (3) the amount stipulated is reasonable, not greatly disproportionate to the presumable loss or injury. Because the master failed to determine whether the sums the vendors retained were reasonable, the case was remanded. On remand, reasonable damages are to be measured as the difference between the market value of the property and the contract price, plus any special damages resulting from the vendees’ breach — i.e., the defaulting vendee is entitled to restitution of payments exceeding the vendor’s actual damages.
- Reasoning: New Hampshire treats the installment land contract as a security device functionally equivalent to a mortgage. Allowing a vendor to retain all installments plus the property regardless of the vendor’s actual loss would be a penalty/forfeiture and would unjustly enrich the vendor. The court therefore subjects the forfeiture clause to the general contract penalty-vs.-liquidated- damages doctrine and grants the breaching vendee a restitutionary offset for any excess.
- Practical impact for CFD operators/buyers: New Hampshire is not a strict- forfeiture state. A seller who simply pockets all payments and reclaims the property risks an order to refund the excess over actual damages. The enforceable measure of a seller’s recovery is (market value − contract price) + special damages; a forfeiture clause survives only if it meets the three-part liquidated-damages test. Operators should size any retained-payment/liquidated- damages clause to a realistic estimate of loss, and should expect a court to test it for reasonableness. Buyers who default retain a restitution claim for payments exceeding the seller’s proven loss.
- Good-law status: Good law. Randall remains the leading New Hampshire authority on installment-land-contract default remedies; no superseding statute or overruling decision was located.
- Source (retrieved): https://law.justia.com/cases/new-hampshire/supreme-court/1983/82-401-0.html (opinion text extracted via search retrieval 2026-06-08; the Justia opinion page returned HTTP 403 to direct fetch but is the canonical public report of the opinion). Corroborated by https://contractfordeed.uslegal.com/state-laws/new-hampshire-contract-for-deed-law/ · Verified: 2026-06-08
Jurisdictions that follow / cite: new-hampshire; consistent in result with the national drift away from strict forfeiture led by skendzel-v-marshall-1973 and sebastian-v-floyd-1979.
Disclaimer. Legal information, not legal advice. Confirm the opinion is still good law before relying on it.