AJM Industries, Inc. agreed to build and install a machine that makes Magic 8-Balls at Katie's factory. The total cost of the machine was $110,000. Pursuant to the contract, Katie gave $55,000 as a deposit and agreed to pay the balance upon delivery. The contract also contained the following provision:

In the event of non-payment of the balance of the purchase price on the due date or on such extended date which may be caused by late delivery on the part of AJM Industries. Inc., the Customer shall be liable for immediate payment of the full balance, plus 10% interest.

When the machine arrived ten days late, Katie refused to accept it, stating that she had purchased a substitute machine from a different seller. Katie sued AJM for the return of her deposit. AJM counterclaimed for full performance of the contract seeking an order that Katie accept delivery of the machine and pay the entire balance of the contract, plus 10% interest.

Start a thread that answers the following questions. Your responses should include/discuss the relevant topics of law.

What arguments would support the claim by Katie for the return of the deposit?

What arguments would support the claim by AJM for full performance of the contract?

Who should prevail? Explain.