Contracts
A buyer makes an offer with an earnest money deposit of $10,000. The contract includes a liquidated damages clause. If the buyer defaults after all contingencies are removed, the seller can:
ASue for the full purchase price
BKeep the $10,000 as the seller's sole remedy under the liquidated damages clause✓ Correct
CKeep the $10,000 and sue for additional damages
DForce the buyer to complete the purchase
Explanation
A liquidated damages clause specifies in advance the damages for breach. If the buyer defaults after contingency removal and the contract includes a liquidated damages clause, the seller typically retains the earnest money as their sole remedy — they cannot sue for additional damages.
Related Idaho Contracts Questions
- What is a 'sight unseen' offer in Idaho and what does the buyer risk?
- What is 'substantial performance' in contract law and how does it apply to Idaho real estate?
- What is the significance of an Idaho real estate contract being 'executory' vs. 'executed'?
- In Idaho, what is the 'doctrine of merger' in real estate transactions?
- What is 'liquidated damages' in an Idaho real estate contract?
- Which of the following best describes a 'voidable' contract in Idaho real estate?
- What is an 'acceleration clause' in an Idaho deed of trust?
- What is 'specific performance' as a remedy in Idaho real estate contract disputes?
Practice More Idaho Real Estate Questions
1,500+ questions covering all exam topics. Start free — no signup required.
Take the Free Idaho Quiz →