Contracts
What is 'liquidated damages' in an Idaho real estate contract?
AActual damages proven at trial
BA predetermined amount of damages specified in the contract to be paid if a particular breach occurs, often the earnest money in purchase agreements✓ Correct
CDamages paid in cash rather than property
DDamages that accrue daily until resolved
Explanation
Liquidated damages are a pre-agreed amount for breach, specified in the contract when actual damages would be difficult to calculate. In Idaho residential purchase agreements, the earnest money is often designated as liquidated damages for the buyer's default — the seller's sole remedy being forfeiture of the deposit.
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Key Terms to Know
Earnest Money
A deposit made by the buyer when submitting a purchase offer, demonstrating serious intent and serving as consideration for the contract.
Purchase AgreementA legally binding contract between a buyer and seller that outlines the terms and conditions of a real estate sale.
ContingencyA condition in a purchase contract that must be satisfied before the sale can proceed to closing.
Option ContractA contract giving the buyer the right, but not the obligation, to purchase a property at a specified price within a specified time period.
Math Concepts
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