Contracts
What is liquidated damages in a California residential purchase agreement?
AThe buyer's loan amount
BA pre-agreed amount (typically the earnest money) the seller keeps if the buyer defaults✓ Correct
CThe agent's commission
DDamages awarded by a court after trial
Explanation
In California residential contracts, liquidated damages clauses (if initialed by both parties) limit the seller's remedy to keeping the deposit if the buyer defaults, instead of suing for full damages.
Related California Contracts Questions
- Under California law, a listing agreement for the sale of a residential property must be:
- A listing agreement is a contract between:
- A purchase agreement signed by a buyer who was under duress would be:
- A listing agreement is a contract between:
- What is a 'land contract' (contract of sale or installment sale contract)?
- A buyer removes all contingencies in writing. The seller then refuses to close. The buyer's most appropriate legal remedy is:
- An option contract gives the optionee:
- The California Residential Purchase Agreement (RPA) is published by:
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