Contracts
A contract provision that states that if either party litigates, the loser pays attorney's fees is called a/an:
AArbitration clause
BAttorney's fees clause✓ Correct
CLiquidated damages clause
DIndemnification clause
Explanation
An attorney's fees clause (or prevailing party clause) provides that in the event of litigation, the losing party must pay the prevailing party's attorney's fees. It is intended to discourage frivolous lawsuits.
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Key Terms to Know
Earnest Money
A deposit made by the buyer when submitting a purchase offer, demonstrating serious intent and serving as consideration for the contract.
ContingencyA condition in a purchase contract that must be satisfied before the sale can proceed to closing.
Purchase AgreementA legally binding contract between a buyer and seller that outlines the terms and conditions of a real estate sale.
Option ContractA contract giving the buyer the right, but not the obligation, to purchase a property at a specified price within a specified time period.
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