Contracts
A contract clause stating that upon buyer default, the seller may keep the earnest money as full compensation and may not pursue additional damages is known as a:
ASpecific performance clause
BLiquidated damages clause✓ Correct
CAcceleration clause
DDeficiency clause
Explanation
A liquidated damages clause pre-establishes the amount of damages upon breach. When it states the earnest money is the seller's sole remedy upon buyer default, it limits the seller from pursuing additional damages beyond the earnest money.
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