Contracts
Which of the following is an example of liquidated damages in a real estate contract?
AA seller suing for lost profits if a buyer defaults
BThe seller retaining the earnest money if the buyer defaults without cause✓ Correct
CA court award of punitive damages for breach
DA buyer's right to sue for specific performance
Explanation
Liquidated damages are a pre-agreed amount that one party may retain or collect if the other breaches the contract. In real estate, allowing the seller to retain the earnest money upon buyer default is a common liquidated damages provision.
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