Contracts
In Hawaii, the purpose of a 'liquidated damages' clause in a purchase contract is to:
AA. Allow either party to escape the contract for any reason
BB. Pre-determine the damages (often the earnest money) that the non-breaching party receives if the other party defaults✓ Correct
CC. Calculate the total purchase price adjustments
DD. Determine the attorney's fees if the contract is litigated
Explanation
A liquidated damages clause specifies in advance the compensation for breach, commonly allowing the seller to retain the earnest money as their sole remedy if the buyer defaults.
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