On July 7, 2000, Frances Morelli agreed to sell to Judith Bucklin a house at 126 Lakedell Drive in Warwick, Rhode Island, for $77,000. Bucklin made a deposit on the house. The closing at which the parties would exchange the deed for the price was scheduled for September 1.
The agreement did not state that time is of the essence, but it did provide, in Paragraph 10, that if Seller is unable to convey good, clear, insurable, and marketable title, Buyer shall have the option to:
(a) accept such title as Seller is able to convey without abatement or reduction of the Purchase Price, or
(b) cancel this Agreement and receive a return of all Deposits.
An examination of the public records revealed that the house did not have marketable title. Wishing to be flexible, Bucklin offered Morelli time to resolve the problem, and the closing did not occur as scheduled.
Morelli decided the deal is over and offered to return the deposit. Bucklin refused and, in mid-October, decided to exercise her option under Paragraph 10(a). She notified Morelli, who did not respond. Bucklin filed a suit in a Rhode Island state court against Morelli.
In whose favor should the court rule?
Should damages be awarded? If not, what is the appropriate remedy? Why?