Contracts
A buyer defaults on an Indiana purchase contract and the seller elects to retain the earnest money as liquidated damages. This means:
AThe seller can also sue the buyer for additional damages
BThe retained earnest money is the seller's sole remedy and no further legal action can be taken✓ Correct
CThe buyer forfeits the earnest money and must also pay the broker's commission
DThe seller must share the earnest money with the listing broker
Explanation
When a contract specifies that earnest money serves as liquidated damages upon buyer default, the seller's acceptance of the earnest money is typically the exclusive remedy — the seller cannot also sue for additional damages.
Related Indiana Contracts Questions
- In Indiana, the phrase 'time is not of the essence' in a real estate contract means:
- A bilateral contract in Indiana real estate is one where:
- Earnest money in an Indiana real estate transaction is held in:
- When a buyer receives the Indiana Seller's Disclosure form after signing the purchase contract, the buyer has how many days to review and potentially withdraw?
- Which contract clause protects a listing broker's commission if the property sells to a buyer the broker introduced, even after the listing expires?
- A right of first refusal in an Indiana real estate contract gives the holder the right to:
- A land contract (contract for deed) is an installment sale arrangement in which:
- Rescission of a contract returns the parties to:
Practice More Indiana Real Estate Questions
1,500+ questions covering all exam topics. Start free — no signup required.
Take the Free Indiana Quiz →