Contracts
The liquidated damages clause in a Kentucky real estate contract typically specifies that if the buyer defaults:
AThe buyer must pay triple the earnest money
BThe seller's sole remedy is to retain the earnest money as damages✓ Correct
CThe seller may sue for all out-of-pocket expenses plus lost profit
DThe earnest money is returned to the buyer automatically
Explanation
A liquidated damages clause, common in Kentucky purchase contracts, states that if the buyer defaults, the seller retains the earnest money as their sole remedy, providing certainty for both parties.
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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.
ContingencyA condition in a purchase contract that must be satisfied before the sale can proceed to closing.
Purchase AgreementA legally binding contract between a buyer and seller that outlines the terms and conditions of a real estate sale.
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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