Contracts
Under Idaho law, what happens to earnest money if a buyer properly exercises a contingency and cancels the contract?
AThe seller keeps the earnest money as liquidated damages
BThe earnest money is returned to the buyer✓ Correct
CThe earnest money is split 50/50
DIREC decides who gets the earnest money
Explanation
When a buyer properly exercises a written contingency (such as a financing contingency or inspection contingency) and provides timely written notice of cancellation, they are entitled to a full refund of their earnest money deposit.
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