ContractsIntermediateArizona Exam

Under the Arizona AAR Residential Purchase Contract, the default remedy if a seller breaches by failing to close is:

AThe buyer's only remedy is return of earnest money
BThe buyer may pursue specific performance, damages, or return of earnest moneyCorrect
CThe seller automatically pays a penalty of 5% of the purchase price
DThe buyer receives double the earnest money as liquidated damages

Why The buyer may pursue specific performance, damages, or return of earnest money Is Correct

Answer B: The buyer may pursue specific performance, damages, or return of earnest money

If a seller breaches a purchase contract in Arizona, the buyer may pursue specific performance (forcing the sale), seek compensatory damages, or elect to cancel the contract and receive a refund of the earnest money.

Exam Tip: Contracts

Contract questions frequently test the essential elements required for a valid contract. Remember: competent parties, mutual consent, lawful object, and sufficient consideration. Watch for void vs. voidable distinctions.

Key Contracts Terms in This Question

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