Magill v. Watson, 409 S.W.3d 673

Magills entered a contract to buy real property from the Estate; closing extended to Jan 25, 2009; Magills deposited $8,000 earnest money; garage encroached setback; Magills terminated before closing; trustees later sued Magills seeking earnest money plus triple liquidated damages and fees.

Issue	Plaintiff's Argument	Defendant's Argument	Held
Standing of the trustees to sue for breach	Magills—trusts had valid assignment	Magills—assignment void; only executor may sue	Trustees had standing; assignment valid
Enforceability of the liquidated damages provision as a penalty	Provision is a valid liquidated damages clause	Clause is punitive and unenforceable	Clause is an unenforceable penalty; recoverable damages limited to earnest money plus costs/fees
Sufficiency of evidence for breach finding	Magills breached the contract by terminating regardless of the variance issue	There was no breach	Evidence supports breach finding; damages equal to earnest money (net of penalty ruling)

Tex. Ass’n of Bus. v. Tex. Air Control Bd., 852 S.W.2d 440 (Tex.1998) (standing and jurisdiction standards for agency and association claims)
Nootsie, Ltd. v. Williamson Cnty. Appraisal Dist., 925 S.W.2d 659 (Tex.1996) (standing via personal aggrievement or assignment)
State Farm Fire & Cas. Co. v. Gandy, 925 S.W.2d 696 (Tex.1996) (assignment of causes of action and public policy limits)
Phillips v. Phillips, 820 S.W.2d 785 (Tex.1991) (test for enforceability of liquidated damages; must forecast and not be a penalty)
Johnson Eng’rs, Inc. v. Tri-Water Supply Corp., 582 S.W.2d 555 (Tex.Civ.App.-Texarkana 1979) (face-of-clause penalties and damages analysis)