Contracts
A Kentucky real estate contract provision that limits one party's liability in the event of default to a predetermined dollar amount is called a:
AContingency clause
BLiquidated damages clause✓ Correct
CSpecific performance clause
DForfeiture provision
Explanation
A liquidated damages clause specifies in advance the amount of damages either party will pay if they breach the contract. This is enforceable in Kentucky if the amount is a reasonable estimate of actual damages, not a penalty.
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