Contracts
When a buyer defaults on a purchase contract, the seller's remedy of keeping the earnest money as full compensation is known as:
ASpecific performance
BRescission
CLiquidated damages✓ Correct
DNovation
Explanation
Liquidated damages is a pre-agreed remedy in the contract where the seller retains the earnest money as full and final compensation if the buyer defaults, rather than pursuing actual damages through litigation.
Related Arkansas Contracts Questions
- When both parties to a real estate contract have fully performed all their obligations, the contract is said to be:
- Which clause in a purchase contract gives the seller the right to continue showing the property while a contingency is pending?
- Under the doctrine of equitable conversion, once a real estate purchase contract is signed:
- A buyer's offer is contingent on obtaining financing. The buyer is unable to qualify for a loan and properly invokes the financing contingency. What happens to the earnest money?
- Earnest money in an Arkansas real estate transaction:
- An as-is clause in a real estate contract generally means:
- A buyer submits an offer. Before the seller responds, the buyer withdraws the offer. This is an example of:
- An amendment to a real estate contract differs from an addendum in that an amendment:
Practice More Arkansas Real Estate Questions
1,500+ questions covering all exam topics. Start free — no signup required.
Take the Free Arkansas Quiz →